Question

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?

(1 point)

Businesses will most likely not offer a variety of products.


Consumers will face higher prices as trade deficits increase.


Industries will increasingly focus on using interdependence.


Producers will be put out of business as more interesting products enter the market.

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Answer 1

Correct answer: Industries will increasingly focus on using interdependence.

Explanation: A free trade agreement lets countries specialize according to comparative advantage, increasing trade and economic interdependence. This typically expands choices and lowers prices rather than reducing variety or necessarily putting producers out of business.