Question

What are the four reasons why a government intervenes in trade and investment activities?

Answer 1

Four reasons why government intervenes in trade

1) one of the main reasons is to protect the infant industries where some markets can be developed abroad but they can still be under the developing stage in the country with which their growth can be hampered with trade

2) another reason is preserving national culture and in this regard it can actually be mentioned that certain goods can destroy National culture and therefore government intervenes

3) reduction in unemployment rate because trade can make jobs to lose in particular industries

4) prevent dumping where protects from the dumping practices of certain goods.