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Chapter 34: Q. 35. (page 832)

Who gains and who loses from trade?

Short Answer

Expert verified

Trade in one hand is good for exporters, consumers and workers but on the other hand some person loses from trade like domestic firms who are uncompetitive.

Step by step solution

01

Step 1. Meaning of trade.

Transfer of goods and services from one person or entity to another, often in exchange for money.

02

Step 2. Following person gains from trade:-

a) Exporters with competitive advantage.

b) Consumers who see lower prices due to the competitive pressure of trade.

c) Workers who gain jobs in export industries.

d) Consumers who benefit from cheaper import prices.

03

Step 3. Following person loses from trade:-

a) Domestic firms who are uncompetitive and lose out to cheaper imports.

b) Particular regions which see a concentrated decline in industries which are now uncompetitive.

c) Workers who loses jobs in domestic industries.

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