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:

Large Business

A corporation or conglomerate with extensive operations, high revenue, and a significant number of employees.

Managing and Coordinating

The processes of directing, overseeing, and orchestrating activities within an organization to achieve predetermined objectives.

Minimum Efficient Scale

Minimum efficient scale is the smallest scale of production at which a firm can achieve long-term average costs that are as low as possible.

Output Level

The amount of products or services that a business or sector generates during a specific period.