2
practice testMultiple Choice

Practice Test

Question 2 • Economics and Personal Finance

What is a benefit associated with free trade?

Answer
A
higher inflation due to import competition
B
increased government revenue from tariffs
C
enhanced innovation and technology
D
limited market access for domestic industries

Explanation

Free trade gives businesses access to larger markets and exposes them to more ideas, products, and competitors. This can encourage innovation and the adoption of new technology. Tariffs, which can raise government revenue, restrict rather than promote free trade, while limited market access and higher prices are not typical benefits.

AI-written and checked against the verified answer.

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