Social Science (087) — AI-generated practice question

No, a country should not avoid foreign trade altogether. While it is true that foreign trade can harm domestic producers (e.g., cheaper Chinese toys displaced Indian toy makers), it also benefits buyers through greater choice and lower prices.

Foreign trade leads to integration of markets — goods travel from one country to another, prices of similar goods tend to become equal, and producers across countries compete with each other. This integration improves efficiency and quality over time.

Instead of avoiding trade, a government can use trade barriers (like import taxes) to regulate trade and protect domestic producers when necessary, while still enjoying the benefits of market integration.

Source: Foreign Trade and Integration of Markets, Chapter 4

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• The examiner wants you to take a balanced stand: acknowledge the harm to producers but argue against complete avoidance.
• Key concept to define/use: integration of markets (prices equalise, choice rises, producers compete globally).
• Mention trade barriers as the middle-ground solution — this shows you understand policy nuance.
• Avoid writing only one side; the question says "justify," so reasoning matters more than just listing points.