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Q.Choose the correct option to fill the blank. The act of opening up economies for trading is known as _________. (A) Balanced trade (B) Unilateral trade (C) Free trade (D) Bilateral trade

CBSECBSE Class XII Board 2025MCQ· 1mImportance★★★★★
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The act of opening up economies for trading is known as free trade.

When a country decides to remove barriers that restrict the flow of goods and services across its borders, it is embracing a policy of openness in international commerce. This process—lifting tariffs, quotas, and other protectionist measures—is fundamentally about allowing markets to operate without government-imposed constraints on cross-border exchange.

Free trade represents the philosophy and practice of permitting goods, services, and capital to move between nations with minimal interference. A government pursuing free trade reduces or eliminates import duties, relaxes licensing requirements, and dismantles regulatory obstacles that previously shielded domestic producers from foreign competition. The underlying belief is that such openness benefits consumers through lower prices and greater variety, while encouraging domestic industries to become more efficient and competitive on the global stage.

The other options describe different concepts in international trade:

  • Balanced trade refers to a situation where a country's exports and imports are roughly equal in value, avoiding large trade surpluses or deficits. …

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