Question

what is a benefit associated with free trade?
increased government revenue from tariffs
enhanced innovation and technology
limited market access for domestic industries
higher inflation due to import competition

Explanation:

• Increased tariff revenue is a feature of protectionism, not free trade (which reduces/eliminates tariffs).
• Free trade exposes firms to global competition, driving them to innovate and adopt new technologies to stay competitive.
• Limited market access is a drawback of protectionism, while free trade expands market access.
• Import competition typically lowers prices, reducing inflation, not increasing it.

Answer:

B. enhanced innovation and technology