What characterizes free trade?

• A. Imposition of heavy tariffs on imports
• B. Trade that does not impose tariffs or taxes on imports
• C. Strict regulations on international trade
• D. A focus on self-sufficiency in local economies

Answer: (B)

Free trade is characterized by the absence of tariffs or taxes on imports, allowing goods and services to move between countries with minimal restrictions. This concept promotes open markets, encouraging competition, innovation, and access to a wider variety of products for consumers. The key aspect of free trade is its emphasis on reducing barriers to trade, which fosters economic cooperation between nations and can lead to more efficient allocation of resources on a global scale.

In contrast, imposing heavy tariffs on imports would directly contradict the principles of free trade by increasing the cost of foreign goods, making it more difficult for consumers and businesses to access those products. Additionally, strict regulations on international trade can hinder the flow of goods and complicate relations between trading partners, which is not aligned with the free trade philosophy. Similarly, a focus on self-sufficiency in local economies generally emphasizes domestic production over international exchange, again diverging from the idea of free trade, which encourages interdependence and sharing of resources across borders.