WAEC 2022 Economics · Question 4
An argument for the use of commercial policy rest on the need to
Options
- A.make imported goods affordable
- B.reduce domestic unemployment
- C.encourage the importation of non-essential goods
- D.make a country enjoy absolute advantage in production of all goods
Answer: B. reduce domestic unemployment
Explanation written with AI and checked against the answer key
Step 1: Analyze the question The question asks about the main argument for using commercial policy. Commercial (trade) policy means government measures that regulate international trade, such as tariffs, quotas, subsidies, import bans and embargoes.
Step 2: Explain the concept Governments use commercial policy to:
- Protect infant industries from foreign competition
- Protect domestic jobs and reduce unemployment
- Correct balance of payments deficits
- Conserve foreign exchange
- Prevent dumping
- Diversify the economy
Step 3: Evaluate each option
- A. Make imported goods affordable: Wrong. Tariffs and quotas usually make imports more expensive, not cheaper.
- B. Reduce domestic unemployment: Correct. By restricting imports, the government encourages consumers to buy locally made goods. Local industries then expand and employ more workers. This is a classic protectionist argument.
- C. Encourage importation of non-essential goods: Wrong. Commercial policy usually discourages the importation of non-essential or luxury goods.
- D. Absolute advantage in all goods: Wrong. This is unrealistic, and trade policy cannot give a country an advantage in everything.
Step 4: Answer
Tip: When you see "commercial policy" or "protectionism" in an exam, think of the keywords protect, jobs, infant industries, balance of payments. Options that say imports become cheaper or more plentiful are usually distractors.
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