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Business Studies IGCSEPDF 193
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Free Trade
Exam Tip: Always mention that
protectionism restricts it.
Encourages competition, innovation, and
efficiency.
Leads to lower prices and more choices for
consumers.
Promotes global cooperation and economic
growth.
Rewards countries that produce what they’re best
at (comparative advantage).
Disadvantages of Protectionism
● Higher prices for consumers.
● Reduced variety of goods.
● Less competition → inefficiency and lower product quality.
● Risk of trade wars if other countries retaliate.
, while
Protectionism
Reduces consumer welfare and
global integration.
To reduce reliance on foreign goods for strategic reasons (like food or energy
security).
To raise government revenue through import tariffs.
Can prevent foreign dominance in
local markets.
May cause inefficiency and higher
prices.
Protects domestic firms and jobs.
6. Free Trade vs Protectionism
free trade supports globalisation