Classical and Neoclassical Trade Theory Makes the Case That Free

question 29

Essay

Classical and Neoclassical trade theory makes the case that free trade can bring a country to an optimum and economically efficient use of its resources; and hence is an optimal trade-policy, if the objective is maximizing long term economic growth. There are those who argue that the experience of the Asian Miracle countries, such as Taiwan, South Korea and Singapore verify this argument in the real world. Explain. There are others who argue that the experience of these countries cannot be used to verify or support the argument above. Explain.

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Definitions:

Book Value

The net value of an asset or a company calculated by total assets minus liabilities and intangible assets such as goodwill.

Sales Taxes

Taxes imposed by governments on the sale of goods and services, typically calculated as a percentage of the sales price.

Transportation Costs

Expenses incurred in the process of moving goods from one location to another, including shipping, freighting, and logistics services.

Cash Terms

Refers to the conditions under which a transaction is made and settled in cash, rather than through credit or financing.