Protectionism

Question 1

list the (5) cons of free trade for country without comparative advantage

Answer 1

i) Imports rise
–> (withdrawal↑)
–> C.A. worsens
ii) Producer Surplus lower
–> make less profit
iii) Structural unemployment
–> due to occupational immobility
–> Gov welfare spending↑
iv) increased welfare spending
v) Social problems