Walter is a financial expert. He has always been skeptical when it comes to the concept of free trade and believes that trade between countries should be subjected to certain restrictions. According to him, "Conducting trade without government intervention is laying the ground for anarchy." Which of the following, if true, supports Walter's beliefs?
A) Free-trade policies only cause short-term economic growth.
B) Free trade can lead to dumping activities.
C) Free-trade policies tend to focus more on infant industries rather than exploring bigger opportunities.
D) Free trade creates trade surplus for both the countries that trade with each other.

Question

Quizplus · Accepted Answer

Free trade can lead to dumping activities, which supports Walter's belief that trade without government intervention can be harmful. Dumping involves selling goods in a foreign market at a price lower than their cost, which can damage the local industry of the importing country. This practice can be seen as a form of economic anarchy, aligning with Walter's skepticism towards unregulated trade.

Walter Is a Financial Expert