The Pros And Cons Of Free Trade

Often, individuals with higher income have flexible regarding purchases considering that they have enough financial power to use on basic needs and to save. As a result, such individuals are expected to buy the company products in bulk or more frequently irrespective of the price of the products. On the other side, low-income earners are not expected to purchase the company products in bulk or frequently. Nevertheless, consumer income is widely affected by the rate of inflation which determines the amount of money they receive as salaries and wages as well as the prices of the company’s product. Inflation is widely defined as the continued increase in prices of products and consumers.

In the case of protectionism, the winners are domestic producers and unskilled workers in the import competing industries and the losers are the consumers. In the case of free trade the winners are the consumers and export industries and the losers are domestic producers in import competing industries and unskilled workers. An important point to be noted here is that the workers who work in protected industries are also consumers in that economy and will be affected by the higher prices of goods and reduction in trade. Since trade benefits consumers in terms of reduced prices of goods, the workers who earn a low income due to a decline in the aggregate demand for domestically produced goods in the import competing industries will also be relatively well off. This shows us that both free trade and protectionism have pros and cons and have different effects on different factors of production in an economy but the bottom line is the benefits from free trade exceed the benefits of protectionism and hence we can argue that the threat of unemployment or decline in real wages does not provide a valid argument for governments to employ protectionist

Former Australian politician and Prime Minister Kevin Rudd said it best when he stated the dependency on each other: “What we have seen in financial markets should bring home to us all that the central organizing principle of this 21st century is interdependence. For the century just past, interdependence may have been one option among many. For the century that is to come, there is no longer an alternative.” Interdependence refers to the fact that countries need to work with each other for trade, production, and consumption of goods to keep the global economy going. The movie A Killer Bargain demonstrates how the tactic of interdependence among countries has caused come countries wealth to flourish while others sink deeper and deeper into

Many did not see success in their agricultural products and sold their lands at extremely low prices. Some immigrated to the United States to have better opportunities, economically wise. NAFTA was intended to decrease the number of illegal immigrants but the exact opposite happened. “By 2006, there were more than 20 million” (The Failures of NAFTA, coha.org) illegal immigrants and two thirds of those people were motivated to move to America because of NAFTA. Others migrated to northern Mexico, where advanced technology for agriculture is prominent.

Introductions International trade refers to a country trade goods and services to another country. International trade open up the world potential market to increase producer sales quantity and increase competition on foreign country. apart from these, international trade will create job opportunity and hence reduced unemployment rate as well as positive balance of payment. however, it might bring negative effects to a country as well, therefore, government play an important role in implementing trade restriction on imported goods in order to prevent imported goods destroy the domestic market or at certain extend, monopolize the market. 94 words A ) Discuss the forms of restriction on international trade.

Inflation is divided into two categories Cost-push and Demand pull inflation: Cost-push inflation means that prices have been hiked up by increases in costs of any of the four factors of production such as (labor, capital, land or entrepreneurship) when companies are already running at maximum production capability. With higher production costs and productivity at it maximum, companies cannot maintain profits by producing the same amounts of goods and services. As a consequence, the increased costs are passed on to customers, causing a rise in the overall price level (inflation). Demand-pull inflation occurs when there is an increase in collective demand, categorized by the four sections of the macro economy: governments, households, businesses and foreign buyers.

Mao Zedong did not make China a better society economically because he got landlords discriminated and made their economy lower, the middle and wealthy class got their land taken and distributed to the poor. In document #9, it stated that the Chinese economy was low and once Mao stop being China 's leader the economy was able to grow again. Chinese society did not get better under Mao’s rule because there was roadblock preventing the economy from growing and Mao was the problem not allowing it to thrive. In document 3, it stated that there was discrimination against landlords.

This helps companies produce products at a cheaper rate and provide services and products in a larger number to a larger market at a reasonable price. This is beneficial to the economy because if one is able to sell a large quantity at a reasonable price, more and more people are going to purchase that good. Another valid point about illegal immigration is that the majority of immigrants are willing to perform jobs that the majority of countries citizens are not willing to do. Illegal immigration can be viewed in two different ways, one can look at it as a completely negative thing and one can also see some positivity in immigration, usually small business owners because immigrants are seen as hard working people. There are many pros and cons with illegal immigration that really gives the reader a better understanding of what illegal immigration really

Illegal immigration has aided the nation’s economic growth by allowing businesses to prosper as the illegal immigrants have provided cheap labor and long hours of hard work. Businesses are not providing insurance both medical and retirement plans for their illegal workers. This results in a lower production cost for the companies and lower prices of goods and services for everyone. Despite the fact that illegal immigrants may not contribute directly to the economy in the aspect of paying taxes like income tax, they contribute to the economy in the form of sales taxes. They do this by purchasing the supplies they need in the same way native citizens or legal immigrants do in order to survive.

“One of the prime advantages that the destination country faces because of illegal immigration is cheap labor. This keeps the economy moving smoothly as the immigrants fill up for the low-wage jobs” (Pros And Cons Of Illegal Immigration, n.d.). It benefits to Small and Medium Enterprises (SMEs) by decreasing the cost of productions. Moreover, when illegal immigrants come to a destination country, “[they] increase the consumer base for the variety of goods and services produced in the country, hence boosting the economy in a big way” (Pros And Cons Of Illegal Immigration, n.d.). This idea seems reasonable.

British sociologist Herbert Spencer adds some social Darwinism by arguing that “free market economies constitute the most civilized form of human competition in which the ‘fittest’ will naturally rise to the top”. This school of thinking believes that inequality is needed to create incentives to drive the performance of companies and individuals. An important element of this trickle down effect involves income tax cuts for the rich. It is argued that cutting income tax for the rich will benefit everyone, not just high income-earners. The trickle down effect explains that if that if higher-income earners get an increase in disposable income, they will thus increase their spending, creating additional demand in the economy.

A trade deficit mostly means that the residents living in that area are doing great and stable enough to purchase more exports. Even though the people can be economically stable, it can reduce the amount of jobs in the industry business in their own countries.