Question

The negative impact of protectionism is when

P increases in the protected industry causing less C in other industries

M decreases due to higher producers prices

jobs are lost in the protected industry

politicians lose their jobs

Answer 1

Jobs are lost in the protected industry

Note that we can expect that the price level to be greater in protective industry because competition is severely restricted. This also implies that the cost of production is going to be in imcompetitive. Imports are obviously declined because of trade and non trade barriers due to protectionism. however jobs are expected to be increased in protected industry because of increased domestic supply. if jobs are lost even in the protected industry then protectionism loses its advantage