1.3.1 Selling goods in a foreign market at prices that are below the cost of production in the country of origin.
1.3.2 Government policy of encouraging domestic producers by means of incentives and facilities to increase their output.
1.3.3 Total reduction in the total tax payable.
1.3.4 Money paid to businesses to decrease their cost of production.
1.3.5 A ban on the import of goods or services.
1.3.6 Charging very low prices that are below the cost of production.
1.3.7 Increased output at lower cost.
1.3.8 Trade agreements that lay down the rules governing the level of trade.
1.3.9 The organization that replaced GATT and promotes the reduction of all trade barriers.
1.3.10 Goods that were previously imported are replaced with locally produced goods.
Answer (2)
The question you have asked about involves various concepts related to international trade and economics. Let's go through each concept one by one to better understand them:
Selling goods in a foreign market at prices that are below the cost of production in the country of origin is referred to as dumping . Dumping is often considered an unfair trade practice because it can damage the industry in the importing country by undercutting local prices.
Government policy of encouraging domestic producers by means of incentives and facilities to increase their output is known as industrial policy or specific government interventions to support and boost domestic industries.
Total reduction in the total tax payable is termed as a tax deduction or tax credit , depending on the context.
Money paid to businesses to decrease their cost of production is called a subsidy . Subsidies help businesses lower their production costs, making their goods cheaper and more competitive in domestic and international markets.
A ban on the import of goods or services is referred to as an import embargo or trade ban . It completely prohibits the importation of specific products or services into a country.
Charging very low prices that are below the cost of production is a practice known as predatory pricing , which aims to eliminate competition by setting prices extremely low.
Increased output at lower cost is achieved through economies of scale . This economic concept means that as a firm produces more goods, the cost per unit decreases because fixed costs are spread over more items.
Trade agreements that lay down the rules governing the level of trade refer to trade treaties or trade agreements . These are negotiated by countries to facilitate and regulate trade between them.
The organization that replaced GATT and promotes the reduction of all trade barriers is the World Trade Organization (WTO) . The WTO was established to oversee global trade negotiations and ensure trade flows as smoothly as possible.
Goods that were previously imported are replaced with locally produced goods is a strategy called import substitution . This policy aims to encourage domestic production of goods to cut down on imports and foster local industry.
Each of these concepts plays a crucial role in understanding international trade and economic policies. They show how governments and businesses interact in the global market to manage trade effectively.
This answer covers key concepts in international trade, including dumping, subsidies, and import substitution. It explains how these elements affect domestic and foreign markets, emphasizing government roles and economic strategies. Understanding these concepts is vital for grasping the complexities of global trade relations.
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