Question

A group of nations establishes a free-trade zone. What is the most likely effect? Cost of trade increases Exports decrease Imports decrease Trade increases

Answer 1

Answer: Option (D) is correct.

Explanation:

Correct option: Trade increases

When a group of countries sit together and agreed to establishes a free- trade zone, this will most likely to increases the trade between the member nations.

Free trade zone refers to remove the barriers, custom interventions and tariffs, so that there will be no restrictions on the free flow of goods and services between the member nations.

Hence, elimination of the barriers across the border lead to increase the trade  between the nations.