ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A free trade agreement is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

Detailed explanation-2: -Free trade benefits consumers through increased choice and reduced prices, but because the global economy brings with it uncertainty, many governments impose tariffs and other trade barriers to protect the industry.

Detailed explanation-3: -free trade, also called laissez-faire, a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports).

Detailed explanation-4: -In other words, free trade refers to the full-fledged elimination of the trade barriers, to promote free movement of goods, services, labour and capital, globally. However, complete removal of barriers is theoretical, as practically government imposes certain measures to keep a check on imports and exports.

Detailed explanation-5: -trade between countries, free from governmental restrictions or duties; 5. free trade is the unrestricted purchase and sale of goods and services between countries without the imposition of constraints such as tariffs, duties, and quotas.