Multiple Choice Question
Why do countries trade with each other?
A.
Most countries trade with other countries in order to make alliances.
B.
Most countries trade for foreign currency to promote economic growth.
C.
Most countries produce a surplus of goods that would be wasted otherwise.
D.
Most countries cannot efficiently produce everything their populations need.
D. Most countries cannot efficiently produce everything their populations need.
The correct answer is D. Most countries cannot efficiently produce everything their populations need.
The correct answer to the multiple-choice question is D. Most countries cannot efficiently produce everything their populations need.
Explanation:
Countries trade with each other for various reasons, but the main reason is that no single country can efficiently produce all the goods and services it needs to sustain its population. Each country possesses unique resources, skills, and technology that can be used to specialize and produce certain goods and services more efficiently than others. By trading, countries are able to access a wider variety of goods and services that they wouldn't be able to produce on their own.
To arrive at this answer, we can analyze the choices provided:
A. Most countries trade with other countries in order to make alliances.
While alliances can be formed through trade, this is not the primary reason for countries engaging in trade. Trade is primarily driven by the economic benefits it brings, rather than solely for the purpose of forming alliances.
B. Most countries trade for foreign currency to promote economic growth.
Promoting economic growth is indeed one of the benefits of trade, but it is not the reason why countries engage in trade. The acquisition of foreign currency is a byproduct of trade, resulting from selling goods and services to other countries, but it is not the main motivator.
C. Most countries produce a surplus of goods that would be wasted otherwise.
Although some countries do produce surpluses that would go to waste, this is not the primary reason for countries engaging in trade. The focus of trade is more on exchanging goods and services that countries can efficiently produce and acquire from each other to meet their needs, rather than preventing waste.
D. Most countries cannot efficiently produce everything their populations need.
This is the correct answer. Most countries have limited resources, technology, and expertise, making it more efficient for them to specialize in producing certain goods and services while relying on others for the products they are less adept at producing. Trade allows countries to acquire what they need from others and focus their resources on their areas of comparative advantage.