Question

Some economists advocate for free trade and others do not. Why do some economists criticize free trade?

A) The criticisms of these economists are simply based on theories. In fact, imports increase both the consumer and producer surpluses as well as employment.
B) Critics of free trade in high-income countries believe that wages will rise as a result of free trade and cause inflation.
C) Critics of free trade believe that it will increase global poverty.
D) Critics of free trade argue that the distribution of gains and losses from trade is inequitable.

Answer 1

Critics of free trade have various concerns, such as the inequitable distribution of gains and losses, potential inflation due to rising wages, and the risk of increasing global poverty.

Step-by-step explanation:

Critics of free trade have various reasons to oppose it. One reason is that some economists believe that the distribution of gains and losses from trade is inequitable. They argue that while free trade benefits society as a whole, it can create winners and losers within a country. These critics contend that certain industries or workers may suffer job losses or lower wages due to increased competition from foreign producers.

Another criticism of free trade comes from economists in high-income countries who fear that wages will rise as a result of free trade, leading to inflation. They argue that the increased demand for goods and services may drive up prices, causing a decrease in purchasing power for consumers.

Furthermore, some critics argue that free trade can increase global poverty. They believe that unrestricted trade can exploit workers in developing countries by promoting unfair labor practices or by exacerbating income inequality between nations.