Reading Comprehension Producers and consumers Once people could only trade what they could produce with their hands or find in nature for things that other people had made. Then money became a medium...

Reading Comprehension

Producers and consumers

Once people could only trade what they couldproduce with their hands or find in nature for things that other people had made. Then money became amedium of exchange andeconomicsystems were created. Today,developments in industry and technology have enabled vast quantities of goods to be manufactured, transported, andtraded, and arange of serviceslike insurance, banking andretail have also appeared. In the digital age, services such asonline shopping have made selling goods even easier and trade is now more global than ever. Have these transformations made our lives better?

The most obvious benefits of trade relate toconsumer choice. There are so many goods and services to choose from that shopping has now become aleisure activity for many people. The internet has also allowed shoppers to compare prices and choose the best deal. However, there are winners and losers; not all consumers have enoughdisposable income to be able to enjoy the choice available. Advertising and the media have contributed to a culture ofconsumerism, in which unhealthy, materialistic lifestyles are encouraged. The over-use ofcredit cards and loans can result indebt, which allows banks to make further profit throughinterest payments and fees.

Not all products are beneficial to society. In their urge to satisfyconsumer demands, companies may manufacture products that are bad for consumers; such as highly refined foods with too much sugar or salt. And it isn’t just the goods themselves that may have negative effects. Our inability to recycle much of what we produce, andsurplus, caused byover-production, can lead to unwanted packaging and unsold goods. If this waste is not properlydisposed of it can end up polluting the land and the oceans, killing plants and animals.

Governments may also choose to regulate the behaviour of large companies to prevent them from competing unfairly with smaller ones.  Large companies are in a stronger position to negotiate cheaper prices fromsuppliers. If a company becomes too big, it can reduce the level of competition in the market and lead to unfairly high prices. Large multinational businesses also sometimes avoid paying tax, for example by locating their offices in countries with low or zero rates of tax.

It is possible to reduce the negative effects of ‘free trade’ by setting minimum wages,nationalizing certain companies (often utility providers), giving subsidies to smaller, local suppliers and lowering tax rates for small or local businesses. Although these regulations may help, the financial influence of large companies and therisk of preventingmarket growth can mean governments don’t regulate fairly. For example, they may avoid closingtax loopholes. Finally, regulations designed to help small businesses can actually harm them, because they often require businesses to make expensive andtime consuming changes to the way they run. (467 words)

9)One of these is
NOTmentioned as a measure for reducing the negative effects of free trade.