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Promoting exports and restricting imports

Write a short treatment on the measures governments take to promote exports and restrict imports. Explain who benefits and who loses from protectionist policies as they relate to the net outcome for society.

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There are many strategies that the government can use to promote exports and restricts imports into the country. In order to promote exports, the following initiatives can be used:

1.Providing subsidies to export producers
If an export producing company receives subsidies from the government, the company can not only lower the cost of production, but it would become more competitive in the world market. In addition, Subsidies would also enable the company to sell products at a much lower price. However, the use of subsidies in this case means that resources are not effectively used. Arguably, companies that are receiving subsidies from the government in order to make exports may make less effort in reducing the cost of production of the product. In United States, the government heavily subsidies domestic farmers in order to boost the domestic food supply. These subsidies help to lower the market price of food and have artificially lowered ...