Which of the following statements best defines the idea of free trade in international economics?

Introduction / Context:
Free trade is a central topic in international economics and public policy debates. The term refers to the degree to which countries allow goods and services to cross their borders without government imposed barriers. Examination questions often test whether students can recognise a precise definition rather than vague phrases about trade being allowed.

Given Data / Assumptions:

• We are dealing with trade between countries.
• Government policies can restrict trade through tariffs, quotas, and other regulations.
• Free trade refers to the absence or near absence of such restrictions.
• We assume standard textbook usage of the term free trade.

Concept / Approach:
Free trade means that goods and services can be exported or imported without artificial barriers such as high tariffs, quotas, or discriminatory regulations. It does not simply mean that some goods are duty free or that only exports are unrestricted. Instead, it implies that prices and trade flows are determined mainly by market forces rather than by trade policies. The best concise description is that there are no restrictions on exports and imports in the form of tariffs, quotas, or similar barriers.

Step-by-Step Solution:
1. Identify that the question asks for a definition, not an example.2. Recall that under free trade, governments do not impose significant tariffs or quantitative limits on international trade.3. Evaluate Option B, which states that there are no restrictions on exports and imports, as closely matching this idea.4. Note that other options mention partial removal of duties or restrictions, which do not fully capture free trade.5. Conclude that Option B provides the best definition of free trade.

Verification / Alternative check:
Consider trade agreements often labeled as free trade agreements. They typically aim to remove or substantially reduce tariffs and quotas on a wide range of goods and services between member countries. The goal is to make trade conditions similar to those that would exist if there were no policy based barriers. This real world usage supports the definition that free trade involves the absence of restrictions on exports and imports, not just on one side of trade or on specific goods.

Why Other Options Are Wrong:
Option A: Saying imports are discouraged describes protectionism, not free trade.
Option C: Removing duties only on exports does not address import barriers and therefore does not create free trade.
Option D: Making imported goods duty free alone is not enough if there are other non tariff barriers such as quotas or licensing restrictions, and this option ignores how exports are treated.
Option E: Controlling exports while freeing imports is also inconsistent with the idea of free trade, which requires minimal barriers on both flows.

Common Pitfalls:
Students may interpret free trade too narrowly as simply zero tariffs, ignoring non tariff barriers like quotas, subsidies, or complex regulations. In practice, many so called free trade arrangements still have some restrictions, but in theory, free trade means no artificial barriers at all. It is also easy to confuse free trade with fair trade, which is a different concept focused on ethical standards and distributional outcomes, not on the absence of trade barriers.

Final Answer:
Free trade is best defined as a situation where there are no restrictions on exports and imports through tariffs or quantitative limits.