International trade organizations promote free trade by encouraging countries to:

• A. restrict foreign investment
• B. increase subsidies for domestic industries
• C. reduce tariffs and other trade barriers
• D. impose quotas on imported goods

Answer: (C)

Verified step by step guidance

1. Understand the concept of free trade: Free trade refers to the removal or reduction of barriers to the exchange of goods and services between countries, allowing for a more efficient allocation of resources globally.
2. Identify common trade barriers: These include tariffs (taxes on imports), quotas (limits on the quantity of imports), subsidies (financial support to domestic industries), and restrictions on foreign investment.
3. Recognize the role of international trade organizations: Their goal is to promote free trade by encouraging policies that reduce or eliminate trade barriers, making it easier for countries to buy and sell goods and services across borders.
4. Analyze each option in the problem: Restricting foreign investment, increasing subsidies, and imposing quotas are all forms of trade barriers or protectionist policies, which go against the principle of free trade.
5. Conclude that the correct approach promoted by international trade organizations is to reduce tariffs and other trade barriers, as this facilitates freer exchange and benefits all participating countries.