Syllabus T. Y. B. A. Paper : IV advanced economic theory with effect from academic year 2010-11 in idol

importing country must reduce national welfare.
In summary,
1) Whenever a "small" country implements a tariff, national welfare 
falls.
2) The higher the tariff is set, the larger will be the loss in national 
welfare.
3) The tariff causes a redistribution of income. Producers and the 
recipients of government spending gain, while consumers lose.
4) Because the country is assumed "small," the tariff has no effect 
upon the price in the rest of the world, therefore there are no 
welfare changes for producers or consumers there. Even 
though imports are reduced, the related reduction in exports by 
the rest of the world is assumed to be too small to have a 
noticeable impact. 
There are a lot of changes in the world in the twenty-first 
century, and one of the areas that show the movement of the world 
exists in the economy. Most of the changes are good because they 
show a development for a better of the whole. It certainly could be 
the loss for a country, but many other countries could gain from it.
An example of that would be the FTA. Since the establishment of 
FTA, not every country in the world is happy with the new 
regulations, especially poor countries. Therefore, the conflict 
between the economic interest of specific groups within the 
community and the economic interests of the community as a 
whole is the essence of the free trade versus protectionism 
controversy (Krauss). That is known as the free traders versus 
protectionism because each side stands for a different point of 
view. It is a true statement by saying that the successful countries 
have pursued a comprehensive approach to development. All in 
all, the key of all is the money. Money is a goal in the business 

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world of trading that motivates countries to compete and find the 
best way to get the most benefits. It is a target that they are looking 
to because money is power. Therefore, in the modern world, 
countries fight with one another with their weapons is their 
economic power. Money determines how rich and strong a country 
ranks in the world.