Question

Which statement best describes both the positive and negative effects of free trade in the modern era?

A) Free trade protects domestic workers from foreign competition but prevents businesses from accepting foreign investment.
B) Free trade reduces the prices of imported goods but makes countries more likely to adopt aggressive foreign policies.
C) Free trade allows countries to be more economically independent but forces them to establish tariffs that limit economic growth.
D) Free trade allows businesses to reduce their labor costs but can lead to exploitation of workers in poor countries.

Answer 1

The positive effect of free trade is that it allows businesses to reduce labor costs, while the negative effect is the potential exploitation of workers in poor countries.

Step-by-step explanation:

The statement that best describes both the positive and negative effects of free trade in the modern era is D) Free trade allows businesses to reduce their labor costs but can lead to exploitation of workers in poor countries. Free trade has the benefit of allowing businesses to lower their production costs by sourcing labor from countries with lower wage rates. However, this can also result in the exploitation of workers in poorer countries where labor regulations and standards may be lower, leading to poor working conditions and low pay.