Case-4 A closed economy is one that has no trading activity with outside economies. An open economy is an economy that interacts with other nations to exchange goods, services, and investments. Most of the countries in the world are open economies. An open economy is advantageous because people can trade in goods and services; indulge in business with the international arena at large. This increases the scope of trade and business leading to profitable earnings. Oman is an open economy having trade relations with many countries. Oman mainly export Oil and import a wide variety of item from various countries including China, India, japan etc. It includes both goods and services. International trade plays a major role in the economic development of Oman. The trade policy with no restrictions on the movements of goods and services between countries is known as free trade. To protect domestic industries from competition, government imposes barriers. The barriers can be both tariff and non- tariff. Tariff barriers include duties and taxes. On-tariff barriers include quotas, subsidies, and licensing. Oman, a WTO Member since November 2000, grants at least most-favoured-nation treatment to all its trading partners. Oman is also a member of the Gulf Cooperation Council (GCC), which also comprises Bahrain, Kuwait, Qatar, the Kingdom of Saudi Arabia, and the United Arab Emirates. A free-trade area among GCC members was established in 1983, and a common market for services in January 2008. Since January 2003, the GCC states have operated a common external tariff (CET) of 0% and 5% on most products. In addition, Oman applies a 100% tariff on imports of alcoholic beverages and pork products Questio-4 i) Discuss the benefits of free trade in an economy. (2 marks) ii) How technological improvement and innovation are promoted in an open economy compared to closed economy? (3 marks) iii) As a member in WTO, what are the general policies that Oman follows in international trade? (2 marks) iv) In a globalized world like ours, will you support the policy of protection in international trade? Justify your answer. (3marks)