The United States signs a free trade agreement with another country that has dramatically different resources. How would this trade treaty affect the United States? Choose one answer.
A.
Businesses will most likely not offer a variety of products.
B.
Consumers will face higher prices as trade deficits increase.
C.
Industries will increasingly focus on using interdependence.
D.
Producers will be put out of business as more interesting products enter the market.
C. Industries will increasingly focus on using interdependence.
To answer this question, we need to understand the potential impacts of signing a free trade agreement with another country that has dramatically different resources. Let's break down each option:
A. Businesses will most likely not offer a variety of products.
This option suggests that signing a free trade agreement would result in businesses not offering a wide variety of products. However, it is important to note that free trade agreements typically aim to promote trade and economic cooperation between countries. As a result, businesses would have access to a larger market and more diverse resources, which would likely increase product variety, rather than decrease it. Therefore, this option is unlikely.
B. Consumers will face higher prices as trade deficits increase.
This option suggests that consumers would face higher prices as trade deficits increase. When a country engages in trade with another country, it may experience either a trade surplus (exports exceed imports) or a trade deficit (imports exceed exports). In this scenario, if the United States signs a free trade agreement with a country that has dramatically different resources, it could lead to a change in trade patterns and possibly result in a trade deficit. However, the impact on consumer prices will depend on various factors, including the specific goods and services involved. Therefore, this option could be a possible outcome, but it is not the only possible result.
C. Industries will increasingly focus on using interdependence.
This option suggests that industries will increasingly focus on using interdependence. When countries engage in free trade, they often specialize in the production of goods and services where they have a comparative advantage. This leads to the concept of interdependence, where countries rely on each other for specific products or resources. By signing a free trade agreement with a country that has dramatically different resources, the United States may indeed increase its reliance on that country for certain products. Therefore, this option is a possible outcome.
D. Producers will be put out of business as more interesting products enter the market.
This option suggests that producers will be put out of business as more interesting products enter the market. While it is true that signing a free trade agreement could introduce new products to the market, it does not necessarily mean that existing producers will be put out of business. The impact on producers will depend on their ability to adapt and compete in the changing market environment. Therefore, this option is not a guaranteed outcome.
Based on the explanations above, the most suitable answer is:
C. Industries will increasingly focus on using interdependence.