The effect of tariffs and tariff barriers was restricted __________ and, therefore protected the domestic firms from foreign competition during the planning period 1950-1990.

Imports

The correct answer is option (2) : Imports

The effect of tariffs and tariff barriers during the planning period 1950-1990 was to restrict imports and protect domestic firms from foreign competition.

Tariffs and Tariff Barriers : Tariffs are taxes imposed on imported goods, and tariff barriers refer to various restrictions that can be placed on the flow of goods and services across borders, such as quotas, licensing requirements, and other trade barriers. The primary purpose of imposing tariffs and tariff barriers is to restrict the quantity of imported goods and make them more expensive. This restriction aims to protect domestic industries from foreign competition by making imported goods less competitive in the domestic market.

By restricting imports, domestic industries are given a competitive advantage. This protectionist approach is often used to encourage the growth and development of domestic industries, prevent job losses, and maintain a favorable balance of trade.