Advantages And Disadvantages Of Free International Trade

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BUSINESS ECONOMICS ASSIGNMENT 4

1) Discuss the advantages and disadvantages of Free International Trade?

(a) Free International Trade:

The positive points of Free International Trade are-

 An increase of local employment- in free trades more and more jobs will be created which in return will increase the employment rate in the country.
 Increased production- the free trade enables the countries to specialize in production of those commodities which are having comparative advantage. In international trade the size of the firm’s market is increased resulting in lower average costs and increased productivity.
 Better quality goods including more variation of goods and helping maintain closer relations between countries. There is better utilization of benefits and resources in the countries.
 Economic growth- in free international trade the countries involved in free trade experience rising living standards, increased real incomes and higher rates of economic growth.
 Larger market to sell, so more potential customers for firms
 Encourages exports and imports so consumers have more choice so a higher standard of living
 Firms produce higher quality of goods due to increased competition

The negative points of Free International Trade are-

 Facilitated commerce system works effectively if all the countries contribute with each one in turn and take after this methodology. On the off chance that a few nations choose that a couple of countries decide to expansion more by driving import constraints, the plan of encouraged business can't work.

 Unbalanced Development in the economy, facilitated commerce and the overall specialization leads to uneven development of the national economy in the world.

 Loss of jobs in...

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Rockel , Wim. V(2004) The Theories of Fixed Exchange Rate, Business Economics papers, vol14, 325-47

Nelly, Jackson & Von. G(1994) The Game theory and its concepts in an economy, 33, 278-99

Moira, J. C(1929) Monetarism and its policies, Advanced Macroeconomics, 223-66

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Samuel, Anderson (1973) Free International Trade being used widely, Business Economic Papers, vol14, 411-26

Hemley, D(1945) Free International Trade advantages and disadvantages, Business Economics, 234-67

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