1. Why do we trade and what is meant by trade? Explain the role of scarcity in an economy?
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2. Why do we need a political party? How can you explain the political system around the world?
Answers
Answer:
Trade protection is the deliberate attempt to limit imports or promote exports by putting up barriers to trade. Despite the arguments in favour of free trade and increasing trade openness, protectionism is still widely practiced.
Barriers to trade can be used to protect sunrise industries, also known as infant industries, such as those involving new technologies. This gives new firms the chance to develop, grow, and become globally competitive.
Protection of domestic industries may allow they to develop a comparative advantage. For example, domestic firms may expand when protected from competition and benefit from economies of scale. As firms grow they may invest in real and human capital and develop new capabilities and skills. Once these skills and capabilities are developed there is less need for trade protection, and barriers may be eventually removed.
Explanation:
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Explanation:
I) Scarcity refers to the basic economic problem, the gap between limited – that is, scarce – resources and theoretically limitless wants. This situation requires people to make decisions about how to allocate resources efficiently, in order to satisfy basic needs and as many additional wants as possible
2) We need political parties because they perform all the functions which are mentioned above. Apart from this, political parties help in representing different views on various issues to the government. They bring various representatives together so that a responsible government could be formed.