Economics

Home > Economics > The global economy > Free trade and protection: advantages and disadvantages of free trade

Questions	Answers
1. All nations have similar factor endowments.	False
2. International trade promotes specialisation.	True
3. A country with an absolute advantage in the production of all goods cannot benefit from free trade.	False
4. A country that is involved in free trade will typically experience higher living standards.	True
5. Free trade allows nations to obtain goods and services they cannot produce themselves.	True
6. Specislisation creates production efficiencies.	True
7. Structural unemployment is an advantage of free trade.	False
8. Countries involved in free trade are less likely to be affected by a downturn in global economic activity.	False
9. Globalisation and free trade has increased the gap between rich and poor nations.	True
10. Comparative advantage is based on the relative efficiency of production.	True