Economics demonstrates that opening up unrestricted free international trade is beneficial to all nations. However, are there any losers from such a policy change?
What will be an ideal response?
Yes, there are losers from opening up to free trade. Domestic suppliers of imported goods lose from allowing free trade. Owners of the businesses lose as do workers who had jobs in the import-competing industries. However, it is important to realize that although there are losers from free trade, there also are substantial gains and the gains exceed the loses so that the nation as a whole is made better off with free trade.
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All governments face a budget constraint: none can spend more than the sum of current government revenues plus the amount that creditors are willing to lend. Why, then, do government budget deficits matter?
What will be an ideal response?
A relatively steep demand curve indicates that
a. quantity demanded will adjust only slightly to a price change. b. quantity demanded will adjust significantly to a price change. c. quantity demanded will not adjust to a price change. d. the change in quantity demanded will exactly equal a change in price.