Which of the following best describes the effect of Snap Style set to 'Grid'?

Setting the Snap Style to 'Grid' in AutoCAD triggers the cursor to snap to the nearest point on the grid. This functionality allows for precise alignment and positioning of drawing elements because the cursor will automatically align itself with the grid points when being moved. It aids in creating orderly and well-structured designs by ensuring that objects can be placed at exact intervals aligned with the grid, enhancing accuracy and efficiency in the drawing process.

The other options highlight different behaviors that do not align with the 'Grid' Snap Style. For instance, if the cursor were to move freely without any limitations, it would hinder the precision that the grid is meant to provide. Similarly, if grid lines were displayed but not utilized for snapping, it would defeat the primary purpose of using a grid in CAD applications. Lastly, having the cursor respect only vertical and horizontal lines does not capture the full breadth of what the grid snapping feature offers, as it is designed to snap to any grid point regardless of orientation, not just the axial lines.