Sunday, January 10, 2016
1.Protection of a young industry
New and small firms, known as infant industries, will be unable to benefit from the economies of scale enjoyed by larger foreign competitors.
2. To prevent unemployment
Yet Although specialization and trade can banefit a country as a whole, it can still cause hardship for some.
3. To prevent dumping
Dumping Occurs when one country floods the market in another country with a product at a price far less then it costs to produce in order to force rival firms in that country out of business.
4. Because other countries use barriers to trade
Before any country removes barriers to trade on foreign goods it needs to be sure that foreign countries will remove barriers to trade on their goods.
5. To Prevent over – specialization
Free trade encourages countries to specialize in the goods in which they have a comparative advantage.
- Google Pict. Unemployment (Accsess on January 1,2016)
- Moynihan. D & Brian Titey. (2015). Economics, A Complete Course for IGCSE and O Level: University of Cambridge International Examination.
Dan Moynihan & Brian Titey. (2015). Economics; A Complete Course for IGCSE and O Level. 2015. hlm 410