What measures can governments use to protect their domestic industries from economic competition?

Governments can implement tariffs, subsidies, and quotas as measures to protect their domestic industries from foreign competition.

Tariffs are taxes imposed on imported goods, making them more expensive relative to domestically produced products. This increased cost can lead consumers to choose local alternatives, thus supporting domestic industries.

Subsidies involve financial support given to local businesses, reducing their production costs. This allows them to lower prices compared to foreign competitors, which encourages consumers to buy domestic products and strengthens the local economy.

Quotas place limits on the quantity of a particular good that can be imported, effectively controlling the supply in the market. By restricting imports, quotas can help ensure that domestic companies have a better opportunity to sell their products without being undercut by cheaper foreign goods.

In contrast, options like import licenses and trade agreements can influence trade flows but do not directly provide as clear protection to domestic industries. Free trade agreements and deregulation generally promote free market competition rather than protectionism. Currency manipulation and structural adjustments could have broader implications for economic policy but are not primary measures specifically aimed at protecting domestic industries from competition.