The Economic Principle I'm Exploring is that people gain when they trade voluntarily.
My research question to help me study the economic principle is How does free trade help Americans?
The article published by Investopedia called Free trade demonstrates this economic principle by showing how free trade would have an affect on the price of goods and consumer spending.
First, cheaper goods coming from places such as China and Mexico makes it so the prices go down on goods. Provided their is free trade the US will be able to get goods from these places that they can price well. Do this this imports and exports will overall increase do to the fact that people will be trading goods more frequently than the already giant trade market.
Secondly studies have shown that with free trade consumer spending would increase by more than 5 percent per year due to this. This is overall good for the economy because consumer spending creates a stronger economy.
Lastly going off of the second point while consumers will be paying less they won't mind paying more for American products. According to the author "although consumers face higher prices and fewer choices under protectionist policies, movements to buy American typically generate widespread support". So even though we will have free trade people will still buy American products that are provided at stores.
In my next blog post I will research the question What countries will benefit from free trade?
I never knew the effect that free trade would have on the global economy.
ReplyDeleteI learned that free trade would help consumers pay less for their products.
I thought it was cool that you picked this topic because it it a very important thing to talk about.
In the future, I would recommend you try to make your posts easier to read by adding a bit of jazz.