Which statement about free trade is supported by the material?

• A. Free trade leads to higher prices for consumers
• B. Free trade allows countries to specialize and access a wider range of goods
• C. Free trade reduces competition
• D. Free trade eliminates the need for any government policy

Answer: (B)

Free trade lets countries specialize and access a wider range of goods. When nations focus on producing what they’re relatively best at and trade for other goods, overall output rises and consumers gain access to a larger assortment of products. Competition and the efficiency of production under free trade help keep prices down or cause them to fall, while the variety of goods available expands beyond what a single country could efficiently produce on its own. The material supports this by illustrating how specialization through free trade broadens both what can be produced and what can be consumed.

Free trade does not inherently raise prices for consumers; it usually helps lower them through competition and economies of scale. It also does not reduce competition; it tends to increase it. And it does not eliminate the need for government policy; governments still set rules, negotiate terms, and regulate standards even in a free-trade regime.