year.?The presence of scale economies favors free trade that generates more varieties and results in lower prices.?Free trade, as opposed to “managed” trade, provides a wider range of opportunities and thus a wider scope for innovation.РThe Case for Free TradeРР8РРРPolitical Argument for Free Trade?A political commitment to free trade may be a good idea in practice.?Trade policies in practice are dominated by special-interest politics rather than consideration of national costs and benefits.РThe Case for Free TradeРР9РРРActivist trade policies can sometimes increase the welfare of the nation as a whole.?There are two theoretical arguments against the policy of free trade:?The terms of trade argument for a tariff?The domestic market failureРNational Welfare Arguments ?Against Free TradeРР10
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