Case Interview Prep

Answer: A - Large, powerful countries are more likely to encourage free trade despite their imposition of protectionist regulations in some sectors of their economies.

Key Takeaway: Countries that are strong economically (or during periods of economic strength) are much more likely to encourage the presence of free trade amongst countries. Despite their call for free trade, they are likely to impose tough protectionist regulations such as subsidies to protect the interests of some sectors of their economies. For example, the United States provides substantial subsidies to their farmers which makes these farmers much more competitive in the world market.