Which term describes the unfettered movement of goods and services across borders?

• A. Tariff barriers
• B. Quota system
• C. Free trade
• D. Import substitution

Answer: (C)

Free trade is the policy framework that allows goods and services to move across borders with minimal or no restrictions. It means reducing or eliminating barriers like tariffs and quotas so market forces determine trade rather than government limits. That unfettered movement described in the question is exactly what free trade aims for: transactions across borders with few obstacles, leading to more competition, lower prices, and broader choices for consumers and firms.

Tariff barriers impose taxes on imports, which makes moving goods across borders more expensive. A quota system caps the amount that can be imported, limiting movement. Import substitution is a policy choice to reduce reliance on foreign goods by promoting domestic production, which actually restricts cross-border trade rather than enabling it.