Using your own words, define both free and restricted trade.

Economics
Tutor: None Selected Time limit: 1 Day

Using your own words, define both free and restricted trade.

What do you feel are the benefits and the cost to having free trade?

What are the benefits and cost to having restricted trade?

Dec 6th, 2014

Free trade is a policy in international markets in which governments do not restrict imports or exports. Free trade is exemplified by the European Union / European Economic Area and the North American Free Trade Agreement, which have established open markets. Most nations are today members of the World Trade Organization (WTO)multilateral trade agreements.trade restriction is an artificial restriction on the trade of goods and/or services between two countries. It is the byproduct of protectionism 

Free trade policies generally promote the following features:

    • Trade of goods without taxes (including tariffs) or other trade barriers (e.g., quotas on imports or subsidies for producers)
    • Trade in services without taxes or other trade barriers
    • The absence of "trade-distorting" policies (such as taxes, subsidies, regulations, or laws) that give some firms, households, or factors of production an advantage over others
    • Unregulated access to markets
    • Unregulated access to market information
    • Inability of firms to distort markets through government-imposed monopoly or oligopoly power
    • Trade agreements which encourage free trade.

reference-http://www.investopedia.com/exam-guide/cfa-level-1/global-economic-analysis/trade-restrictions.asp

Dec 6th, 2014

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