[Solved] 1 Explain what is meant by the term, ‘free trade’?

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[Solved] 1 Explain what is meant by the term, ‘free trade’?

Economics 2: The World Economy — F86E 35

SCQF level 8

Report conventions should be followed as per the Business Department’s house style. Should be approximately 1,500 words. This should be completed by week 10.

Report Questions to Research

1 Explain what is meant by the term, ‘free trade’?

2 Explain absolute and comparative advantage using either a worked example, or an analysis of the changes in the United Kingdom’s (UK) absolute and comparative advantage.

3 Identify three gains from trading internationally.

4 Explain the terms ‘protectionism’ and ‘barriers to trade’. In your explanation identify why governments might wish to use trade barriers to protect their respective economies.

5 Describe the role of the World Trade Organisation (WTO) in the development of free trade.

6 Explain the role of one of the following trade blocs:

• The European Union (EU)
• The North American free Trade Agreement (NAFTA)
• The Association of Southeast Asian Nations (ASEAN)

7 Referring to UK trade figures from recent years explain the composition of the UK balance of payments.

8 What are the general trends in UK trade over the last 30 years? You should refer to the current balance over this period in your response.

9 How is the balance of payments affected by exchange rates? You may provide a basic theoretical example or recent case to illustrate this.