Author Question: Why is the notion of specialization important when analyzing the benefits of free trade? What ... (Read 79 times)

Metfan725 · **on:** Jul 7, 2018

Why is the notion of specialization important when analyzing the benefits of free trade?

What will be an ideal response?

Question 2

Seemingly simple logistics and materials management issues often become much more complex in an international context.

Indicate whether the statement is true or false

flannelavenger · **Reply #1 on:** Jul 7, 2018

Answer to Question 1

Critics of free trade worry that imports can have a negative effect on a country because they involve an outflow of capital. Those taking this perspective argue that by substituting locally-made goods for imports allows the country to not only have the goods, but also keep the money. Supporters of free trade disagree. They believe that it is important to consider the role of specialization. If countries specialize in what they do best, and trade for everything else, their resources are more productive and ultimately, the country will be better off. Those taking this view feel that limiting imports only forces a country to make an inefficient use of its resources.

Answer to Question 2

TRUE