Question

discuss the advantages and disadvantages of openness to direct foreign and free trade between developing and developed economies.

Answer 1

Advantages-

1) inreased economic growth

2) lower government spending

3) foreign direct investment in developing countries will increase employment

4) develped nations can get their work done at cheap rates or in countries where labour is cheap

5) technology transfer and expertise

6) increase job opportunities

Disadvantage-

1)increases dependency between nations

2) trade will differ,some countries will benifit more due to theory of gravity model

3) threat to domestic industries

4) increase competition

5) high level of outsourcing destroys the home economy