IB International Economics HL Practice Exam 2025 – Your Comprehensive Guide to Mastering Higher Level Economics!

Anti-dumping duties are designed to protect domestic industries from unfair competition that arises when foreign producers sell goods in the domestic market at prices lower than their normal value, which often occurs due to substantial subsidies or lower production costs abroad. By imposing these duties, the government ensures that imported goods are priced fairly, allowing domestic producers to compete more effectively without being undercut by unfair pricing practices.

The primary goal is to promote fair competition and maintain a level playing field for domestic businesses, thereby safeguarding jobs and economic stability within the country. When these duties are applied, they help to level the pricing disparities caused by dumping, which can harm local industries and lead to market distortions.

The other options do not accurately reflect the main purpose of anti-dumping duties. While subsidizing domestic companies may be a government response to market challenges, it is not the function of anti-dumping duties. Currency manipulation is a separate issue typically dealt with through different regulatory mechanisms. Imposing tariffs on all imported goods is a broader trade policy and does not specifically address the problem of dumping. Thus, the correct choice encapsulates the specific intent of anti-dumping measures.