Social Science (087) — AI-generated practice question

When a country removes all trade barriers (liberalisation), domestic producers face increased foreign competition. This forces them to improve quality and efficiency to survive — benefiting the economy in the long run, though weaker producers may suffer initially.

For consumers, removal of trade barriers means greater variety of goods at more competitive prices. As seen in India after 1991, markets were transformed with wider choices — from cars to electronics — at affordable prices.

However, the change may hurt small domestic producers who cannot compete with cheaper or better-quality foreign goods, leading to possible loss of livelihoods.

Source: Chapter 4 — Liberalisation of foreign trade and foreign investment policy

---

• The examiner expects three clear points: effect on producers (competition → improvement), effect on consumers (variety + lower prices), and a balanced note on small producers being hurt.
• Use the word liberalisation — it is the textbook term.
• Refer to India's 1991 policy shift as the concrete example; don't write a general essay.
• Avoid padding; 3 marks = ~3 distinct points, each one sentence.