Question

question 4 of 10
when nations are engaged in free trade with each other, what are they doing?

a. eliminating shipping costs between member countries
b. limiting the use of tariffs and quotas on each other’s businesses
c. raising the level of tariffs and quotas with each other
d. lowering the costs of all products with each other

Explanation:

Free trade focuses on reducing trade barriers. Tariffs (taxes on imports) and quotas (limits on imports) are key trade barriers. Option A is incorrect as free trade doesn’t eliminate shipping costs. Option C is wrong because free trade reduces, not raises, tariffs/quotas. Option D is incorrect as free trade doesn’t guarantee all products’ costs are lowered (costs depend on many factors). Option B matches the definition of free trade—nations limit using tariffs/quotas to facilitate trade.

Answer:

B. Limiting the use of tariffs and quotas on each other’s businesses