Answer to Question 1
TRUE
Answer to Question 2
Governments impose restrictions on free trade for reasons that are political, economic, or cultural-or some combination of the three. Countries often intervene in trade by strongly supporting their domestic companies' exporting activities. But the more emotionally charged intervention occurs when a nation's economy is underperforming. In tough economic times, businesses and workers often lobby their governments for protection from imports that are eliminating jobs in the domestic market.
Government officials often make trade-related decisions based on political motives because a politician's career can depend on pleasing voters and getting reelected. The main political motives behind government intervention in trade include protecting jobs, preserving national security, responding to other nations' unfair trade practices, and gaining influence over other nations.
Although governments intervene in trade for highly charged cultural and political reasons, they also have economic motives for their intervention. The most common economic reasons for nations' attempts to influence international trade are the protection of young industries from competition and the promotion of a strategic trade policy.
Nations often restrict trade in goods and services to achieve cultural objectives, the most common being protection of national identity. Culture and trade are intertwined and greatly affect one another. The cultures of countries are slowly altered by exposure to the people and products of other cultures. Unwanted cultural influence in a nation can cause great distress and cause governments to block imports that it believes are harmful.
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