Chapter 18, Problem 20AA

To determine

To explain: The points in favor of free trade and protectionism.

Explanation of Solution

Free trade allows the movement of goods and services, capital, labor etc. to move freely between countries without any trade barriers while protectionism opposes this idea and restricts imports by imposing several tariff and non-tariff barriers.

So, the combination of two would help any country to expand its roots globally while saving their domestic industries against foreign competition. The policy so formed can be named as export promotion and import substitution.