Question

Free Trade Area means:

• A. The area where anything can be bought and sold
• B. Countries between whom trade barriers have been substantially reduced
• C. Countries which have common external tariff
• D. Countries which have common currency

Answer 1

The Correct Option is B

A Free Trade Area (FTA) refers to a group of countries that have agreed to reduce or eliminate trade barriers, such as tariffs and import quotas, among themselves. The goal of a free trade area is to encourage the flow of goods and services between these countries by making it easier and more cost-effective to trade.

In a Free Trade Area, countries do not impose tariffs or other restrictions on the trade of goods and services between them. However, each country maintains its own trade policies and tariffs with non-member countries. This means that trade barriers are substantially reduced or eliminated only within the area, but external trade policies may vary.

Thus, the correct answer is: Countries between whom trade barriers have been substantially reduced.