Australia exports more goods to China than any other country it trades with. These goods include such things as iron ore, coal, crude petroleum, and wool. In turn, Australia imports goods like computers, cars, and refined petroleum from China. This is an example of how _______ promotes trade.

a tariff
a quota
specialization
productivity

I believe it is Tariff

If your reading assignment says tariff, it must be right.

This is an example of how specialization promotes trade. Specialization refers to the concept of focusing on producing goods or services in which a country or individual possesses a comparative advantage, meaning they can produce those goods or services more efficiently or at a lower cost compared to others.

In this case, Australia specializes in producing and exporting commodities like iron ore, coal, crude petroleum, and wool, which China requires for its industries and manufacturing processes. By specializing in these goods and exporting them to China, Australia can take advantage of its natural resources and productive capabilities to generate revenue and economic growth.

On the other hand, China specializes in producing goods like computers, cars, and refined petroleum, which Australia imports. This allows Australia to access these goods at competitive prices, boosting its domestic consumption and supporting various industries and sectors.

Specialization promotes trade because it allows countries to maximize their efficiency and productivity by focusing on what they do best. It enables countries to benefit from comparative advantages, leading to increased trade flows, economic growth, and the overall welfare of both trading partners.