Final answer:
A government can protect the domestic shoe manufacturing industry through fiscal policies such as implementing a protective tariff, providing financial incentives to domestic manufacturers, and investing in infrastructure development. These actions aim to promote domestic production, stimulate growth, and enhance competitiveness.
Step-by-step explanation:
A government can take several fiscal policy actions to protect the domestic shoe manufacturing industry. One specific action is the implementation of a protective tariff. This involves imposing a tax on imported shoes, making them more expensive and less competitive compared to domestically manufactured shoes. By doing so, the government can incentivize consumers to buy shoes produced domestically, which would support and sustain the domestic shoe manufacturing industry.
Another fiscal policy action is the provision of financial incentives or subsidies to domestic shoe manufacturers. This can include government grants, tax credits, or low-interest loans that can help offset production costs and make it more affordable for domestic manufacturers to compete with imported shoes. These incentives can stimulate growth and innovation within the industry.
Furthermore, the government can invest in infrastructure development that supports the shoe manufacturing industry. This can include funding the construction of specialized manufacturing facilities or providing grants for research and development of new technologies in shoe production. By facilitating the growth and modernization of the industry, the government can enhance its competitiveness in the global market.