Which statement is an argument in favor of free trade?

• A. It protects domestic industries by raising tariffs
• B. It reduces consumer choice
• C. It increases barriers to trade
• D. It allows countries to specialize in producing goods and services

Answer: (D)

Free trade hinges on specialization and gains from trade. When countries focus on producing the goods and services they’re relatively most efficient at, they use their resources more effectively and trade for what others produce well. This specialization increases overall production, lowers costs, and yields cheaper, more varied options for consumers. The other statements describe policies that raise barriers or reduce choices, which run counter to the idea of free trade. Tariffs protect domestic industries but raise prices and distort markets; increasing trade barriers or limiting consumer options also dampen the benefits of global exchange. So, the statement that best reflects a benefit of free trade is that it allows countries to specialize in producing goods and services.