8 Why do free trade agreements increase globalized trade?
Free trade agreements allow countries to not pay any money for
international goods and services.
A)
Free trade agreements significantly decrease transaction costs leading to a
decrease in the cost of international goods and services.
B)
Free trade agreements prevent countries from purchasing international
goods because the price of goods and services are produced cheaper
domestically.
Free trade agreements use the same çurrency so that countries do not have
to pay transaction costs to exchange currency in the foreign exchange
market.
D

Free trade agreements significantly decrease transaction costs leading to a

decrease in the cost of international goods and services.

Explanation:

Given that the primary purpose of the Free Trade Agreement is to lessen the impediments that often make the business transaction between two or more countries difficult or expensive, thereby leading to lower cost of international commodities and improved economic integration among the countries involved. For example removal of trade tariffs and trade quotas.

Hence, Free trade agreements increase globalized trade because "Free trade agreements significantly decrease transaction costs leading to a decrease in the cost of international goods and services."

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