ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the reduction of tariffs and subsidies in countries so they are no longer as large as they were in the past
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the removal of all trade barriers both direct and indirect to facilitate more efficient use of scarce resources
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the free movement of all goods, service, ideas, people, money and technology across the globe
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trade which is based on the cheapest prices due to the benefits of perfect competition and economies of scale
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Detailed explanation-1: -Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange. The concept of free trade is the opposite of trade protectionism or economic isolationism.
Detailed explanation-2: -The most common barrier to trade is a tariff–a tax on imports. Tariffs raise the price of imported goods relative to domestic goods (good produced at home). Another common barrier to trade is a government subsidy to a particular domestic industry. Subsidies make those goods cheaper to produce than in foreign markets.
Detailed explanation-3: -Trade liberalization is the removal or reduction of restrictions or barriers on the free exchange of goods between nations. These barriers include tariffs, such as duties and surcharges, and nontariff barriers, such as licensing rules and quotas.
Detailed explanation-4: -Free trade is fair to businesses seeking to expand but it does not favor the rights of workers or seek to improve working conditions. Instead, free trade seeks to eliminate pay discrepancies (imbalances) from country to country. Meanwhile, fair trade promotes fair wages and working conditions for labourers.