Question

What are the trade offs associated with international trade?

1) Increased competition and potential loss of domestic industries
2) Access to new markets and increased economic growth
3) Potential for cultural diffusion and exchange
4) Increased dependence on foreign countries for goods and services

Answer 1

International trade has trade-offs including increased competition and potential loss of domestic industries, access to new markets and increased economic growth, potential for cultural diffusion and exchange, and increased dependence on foreign countries for goods and services.

Step-by-step explanation:

International trade comes with several trade-offs:

1. Increased competition and potential loss of domestic industries: With international trade, domestic industries face competition from foreign companies, which can lead to job losses and the decline of certain industries.
2. Access to new markets and increased economic growth: International trade allows countries to access new markets, which can lead to increased economic growth and prosperity.
3. Potential for cultural diffusion and exchange: Through international trade, different cultures can interact and exchange ideas, leading to cultural diffusion and a richer cultural landscape.
4. Increased dependence on foreign countries for goods and services: Reliance on imports can make a country vulnerable to disruptions in the global supply chain and economic fluctuations in other countries.