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Sagot :
As a general rule, free trade increases demand for factors that are domestically abundant, and it decreases the supply of factors that are domestically scarce.
Free trade refers to the ability of countries to trade freely with others without any restrictions, like tariffs or quotas. When countries engage in free trade, the demand for factors of production, like labor and capital, tends to increase in countries that have an abundance of those factors. This happens as free trade allows countries to specialize in producing commodities. that they are most efficient at, which in turn increases the demand for the factors of production that are used to produce those commodities.
At the same time, free trade also tends to decrease the supply of factors of production that are scarce in a particular country. This is because free trade allows countries to import commodities. that they are not efficient at producing, which reduces demand for domestically scarce factors of production. As a result, the supply of those factors decreases and their prices may rise.
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