Free Market Flashcards
1
Q
What is the free market approach
A
Economic liberalisation—> encourage free trade, deregulate markets
Floating exchange rate —> reduce the current account deficit
Tight monetary and fiscal policy —> control inflationary pressures
2
Q
What are the benefits of free market approaches
A
Free trade benefits
Deregulation benefits
Benefits of FDI/MNCs
3
Q
What are the drawbracks of free market approaches
A
Arguments for protectionism
Free trade for LEDCs can lock them in producing low income growth products
Privatisation shifts the goal from social objectives to profit maximisation
May lead to development of monopolies
