Question

1. What are the pros and cons of free market solutions to the following:

a. Retirement

b. International trade

c. Employment/unemployment

Answer 1

In a free market, there is no government intervention.

Pros and Cons of free market for the following are

(a) Retirement

Pros-

1- It avoids higher taxes.

2- The private sector is more efficient.

Cons

1- Private schemes sometimes fail to reach the desired level.

2- It takes time to change.

(b) International Trade

Pros-

1- It helps in expanding foreign Direct Investment (FDI)

2- It leads to human resource and technology transfer

Cons-

1- The jobs are outsourced to developing nations

2- Sometimes there is theft of intellectual property.

(c)  Unemployment

Pros-

1- Higher wages in the free market

2- More number of jobs and fewer workers

Cons-

1- Slower economy growth

2- Faster interest rates hike