12
QuizMultiple Choice

Trade and Development — Test

Question 12 • Economics and Personal Finance

What is one reason two countries may sign a treaty to create a direct agreement with one another?

Answer
A
to establish barriers to trade
B
to cut taxes
C
to collect more taxes
D
to limit trade opportunities for competing companies

Explanation

A direct treaty between two countries can lower or remove taxes on goods traded between them, making trade easier and less expensive. Therefore, one reason they might sign such an agreement is to cut taxes. Establishing trade barriers or limiting competitors would restrict trade rather than encourage it.

AI-written and checked against the verified answer.

Previous
Next