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Explain five disadvantages that a country may face if she restricted trade with other countries

Explain five disadvantages that a country may face if she restricted
trade with other countries

Answers

gregory
? Reduced competition – leading to low quality goods/ services
? Reduced/ low consumer goods – trade restriction reduces the availability of
goods/ services available to consumer leading to low state of living.
? Retaliation/ trading partners are likely to retaliate – leading to loss of
business (between two involved/ reduced export/ imports)
? Reduced/ low investment – due to limited trading opportunities
? Reduced limited market – hence under exploitation of available resources/
reduced production capacity.
? Inappropriate allocation of resources – It may force the use her resources in
areas where she has no comparative interest/ not best suited in.
? Cost to the government – (This may happen) if measures are used (to
enhance restriction /by encouraging import substitution) meet part of the
costs.
? Reduced/ loss of government revenue earned from import/ export services
not exported.
? Leads to increased unemployment due to reduced trading activities.
? Poor international relations which may lead to conflicts/ friction, among
countries/ may not get assistance in times of calamities.
? Curtailed transfer of technology/ factors of production that may lead to poor
quality goods low quantity of products.
? Reduced/ limited supply of goods/ services which may adversely affect
consumers (access /examples of adverse effect as explanation)
? Encourages smuggling/ black marketing leading to loss of revenue/ entry of
counterfeit goods/ services.
gregorymasila answered the question on January 26, 2018 at 06:54

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