Need help with Topic 1 free trade (1 Viewer)

[cs01001]

:wave:

I was just going through the syllabus and came across the point 'The basis of free trade - its advantages & disadvantages'. Can someone explain to me what 'basis of free trade means'. Please?

Thanks

 

[cs01001]

Thanks WW

 

[williamc]

Advantages:

Allows specialisation of industries
Lower prices
Increaes international competitiveness
Long term lower level oif unemployment

Disatvantages:
Higher unemployment short term
Dumping can occur.
Insuffiecent protection of infant inductries

 

[Sparcod]

Sounds great.

Advantages:

Allows specialisation of industries
Lower prices
Increaes international competitiveness
Long term lower level oif unemployment

As well as:

Lower inflation in both short and long run
Improve quality and quantity of goods sold/ higher living standards

Disatvantages:
Higher unemployment short term
Dumping can occur.
Insuffiecent protection of infant inductries

CAD in short run if you move towards free trade
Less self-sufficiency and hence more prone to external shocks (eg Banana Republic)