A revision presentation on aspects of international trade theory covering comparative advantage and the assumptions behind standard A level trade theory
Key exam point:
Mutually beneficial terms of trade are not necessarily those that benefits both countries equally – the benefits from exporting and importing goods and services may be unbalanced. Indeed, the perceived unfairness of trade is often used as one justification for protectionist policies such as import tariffs and quotas and forms of hidden protectionism. Whenever you are discussing the economics of trade, remember to comment on possible distributional effects as part of the evaluation.
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