Understanding Free Trade: Theory and Practice

The World Trade Organization (WTO) was established in 1948.

Mercantilism aims to achieve a trade surplus by minimizing exports and maximizing imports.

The law of comparative advantage was first introduced by an economist from the United States.

A country has an absolute advantage if it can produce goods at a lower cost than other countries, but still makes a loss.

The General Agreement on Tariffs and Trade (GATT) was replaced by the World Trade Organization (WTO) in 1948.

Today, only about 50% of all world trade is conducted through the World Trade Organization (WTO).

The absence of government policies on the import and export of goods and services is a key component of protectionism.

Most industrialized nations have successfully implemented pure free-trade policies.

Free trade agreements (FTAs) typically result in unrestricted free trade between participating nations.

Economists believe that trade restrictions are the key to maintaining a healthy global economy.

The United States has a protectionist trade policy and does not engage in free trade agreements.

The North American Free Trade Agreement (NAFTA) is an example of a protectionist trade policy.