Question

All of the following are considered benefits of free trade EXCEPT A) quota reduction. B) growth of trade. Reactivate C) protective tariff reduction. Reactivate D) protection of domestic industries.

Answer 1

Answer:

D. Protection of domestic industries

Explanation:

Free trade is practiced when there are no restrictions on import and export of goods and services. The major objective of free trade is to facilitate growth of trade in a country.

All the available options are benefits of free trade except protection of domestic industries. There will be a tough competition for domestic industries where free trade is practiced because of the free flow of goods and services from foreign countries which can lead to excess supply in the market and thereby erodes the profitability of the domestic industries.Imported goods can also be cheaper compared to locally manufactured goods and this will make local goods unattractive to consumers, leaving domestic industries exposed to low demand.

So one of the benefits of free trade is not protection of domestic industries.