IGCSE Development Studies: Specimen Questions with Answers 19 - 20 of 98

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Question 19 (4 of 7 Based on Passage)

Short Answer▾

Differentiate between free trade and protectionism.

Differentiate between Free Trade and Protectionism
S. No.	Free trade	Protectionism
1.	The idea that countries benefit from trading with other nations	Protectionism is the idea that protecting the home market is necessary because other countries take advantage of a country.
2.	The policy of trading nations without restrictions.	The policy of using tariffs or quotas to restrict trade
3.	The concept that a nation has an “open economy”	The concept of protecting domestic workers and industries in the face of foreign competition.
	It fosters efficient market mechanism	It increases international competition and efficiency
5.	It strengthens absolute/comparative advantage	It allows freer movement of resources.

Short Answer▾

Free trade is good for nations?

The exporters with competitive advantage
The nations having workers who gain jobs in export industries.
Nation having net economic welfare gain for society
Consumers of nations who get benefits from cheaper prices.
Domestic firms who see higher demand from consumers who now have more disposable income due to cheaper imports.
The nation whose consumers see lower prices due to the competitive pressure of trade.