Free Trade Flashcards
1
Q
Free Trade
A
free trade is when there are no artificial barriers to trade imposed by governments
2
Q
Who developed the theory of comparative advantage
A
David Ricardo
3
Q
List of the benefits of free trade
A
more efficient allocation of resources, specialisation, economies of scale, promotion of competition and innovation, increased scale of living, decrease prices of goods
4
Q
List of the disadvantages of free trade
A
hard for new businesses to set up, dumping of goods from foreign companies and wiping out other companies in the industry
5
Q
Define Protection
A
Protection is an artificial benefit given to domestic firms by the government in order to give them an advantage over international competitors
