IGCSE Development Studies: Specimen Questions with Answers 20 - 21 of 98

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Question 20 (5 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▾

Differentiate between free trade and custom union

Differentiate between Free Trade and Custom Union
S. No.	Free Trade	Custom Union
1.	The free trade area economic integration is the is the least restrictive among the countries.	Members of custom union dismantle barriers to trade in goods and services among themselves.
2.	In a free trade area, all the barriers to trade among member countries are removed.	A custom union establishes a common trade policy with respect to non-members
3.	No external tariff	Common external tariff