Why do countries trade goods and services?(2 points)

Question

Responses

because they do not have all the goods and resources they need
because they do not have all the goods and resources they need

because they want to help other countries grow
because they want to help other countries grow

because they want to protect domestic industries from competition
because they want to protect domestic industries from competition

because they want to reduce interdependence
because they want to reduce interdependence

Answer 1

Countries trade goods and services primarily for two main reasons:

1. Because they do not have all the goods and resources they need: Different countries possess different resources, climates, and levels of technology. This means that no single country can produce everything it needs. By trading, countries can acquire goods and services that they lack, leading to more efficient resource allocation and higher overall economic welfare.

2. Because they want to help other countries grow: While this may not be the primary motivator, trade can contribute to the economic development of nations involved. By engaging in trade, countries can share resources, knowledge, and technologies, which can help with mutual growth and development.

The other options—protecting domestic industries and reducing interdependence—often do not drive trade but can be reasons for trade restrictions or policies.