ECONOMICS
TECHNOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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allow countries to specialise in goods in which they have the greatest opportunity cost.
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tend to lead to greater diversity in domestic production.
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reduce the level of the current account deficit in the short term
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lead to higher living standards for domestic consumers.
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Detailed explanation-1: -Trade liberalization removes or reduces barriers to trade among countries, such as tariffs and quotas. Having fewer barriers to trade reduces the cost of goods sold in importing countries. Trade liberalization can benefit stronger economies but put weaker ones at a greater disadvantage.
Detailed explanation-2: -Increase in the employment opportunities. Economic development of the nation. Reduction in rates of interest and tariffs. Development in technology due to use of foreign technology in industrial applications.
Detailed explanation-3: -Trade contributes to global efficiency. When a country opens up to trade, capital and labor shift toward industries in which they are used more efficiently. That movement provides society a higher level of economic welfare.
Detailed explanation-4: -International trade allows countries to expand their markets and access goods and services that otherwise may not have been available domestically. As a result of international trade, the market is more competitive. This ultimately results in more competitive pricing and brings a cheaper product home to the consumer.