Question

Which of the following is not one of the common arguments against free trade?

A. fear of the effects of globalization on a nation's culture

B. a company is too weak to withstand competition from other firms and requires government protection to survive

C. allowing countries to specialize in the production of only one good may result in the creation of banana republics

D. firms always win at the expense of consumers

E. countries with tax environmental policies allow for more pollution than those with strong environmental policies

Answer 1

Ans- As we know that the Free Trade is an police where there is an no imposing of tax on the import of goods and services, which has its own benifits and losses to an country, and different economist has different view on respect of free trade which leads to an argument.

Option A - The first one provided as the fear of effects of globalization of country is an argument which will against the free trade as it will lead to the foreign countries to investment which will lead an competition for small industry and slowly slowly it may lead to the eradiction of Small Industry of and country

Option -B. a company is too weak to withstand competition from other firms and requires government protection to survive - It is an argument which will also go against the free trade, as for example an country who is just a developing country who has less developed company let's say one company named X it is small sector business which produces cotton in a small earn it's profit and if an other firms let's say Y and Z comes from outside the country and it starts producing not only cotton also cotton clothes this will provide option to customer, but company name X will not able to compete and slowly it's demand will decrease and later company may shut down due to hence, option B is incorrect

Option C - Provided on the question is on against of free trade as here countries has been allowed to produce only one goods for eg let's take banana so that banana republic can be made, here if free trade starts then other countries will start producing multiple products which will lead to competition and end of monopoly and start of Free trade hence option C is also incorrect

Option D - Here option is an correct answer as in this economist is saying firms wins at the expense of customer which is true, it had nothing to do with free trade , as it is an argument which support free trade whenver there is an heavy tax imposed on the good and services all those has taken from customer by imposing taxes or increasing the prices of the goods, hence when free trade enters the price of the goods will decrease and consumer will stay in peace.

Option E - It is also an incorrect answer as per this those countries who do the free trade they exploit there resources as much as possible so that perfect quality goods can be export and it leads to loss of an environment and air.