McqMate
| Q. |
Free Trade refers to - |
| A. | free movement of goods from one country to another |
| B. | movement of goods free of cost |
| C. | unrestricted exchange of goods and service |
| D. | trade free of duty |
| Answer» A. free movement of goods from one country to another | |
|
Explanation: Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation. |
|
View all MCQs in
Economics (GK)No comments yet