Question

What is the purpose of a trade agreement reducing trade barriers between the United States and a low-income economy?

1) To promote economic growth and development in the low-income economy
2) To protect domestic industries in the United States
3) To increase competition and consumer choice in both economies
4) To reduce poverty and inequality in the low-income economy

Answer 1

The purpose of a trade agreement reducing trade barriers between the United States and a low-income economy is to promote economic growth and development in the low-income economy, increase competition and consumer choice in both economies, and not specifically to protect domestic industries in the United States.

Step-by-step explanation:

The purpose of a trade agreement reducing trade barriers between the United States and a low-income economy is to promote economic growth and development in the low-income economy. By reducing trade barriers such as tariffs and quotas, it allows businesses in the low-income economy to access larger markets and attract foreign investments, which can contribute to the growth of industries and increase employment opportunities. Additionally, it helps to facilitate the transfer of technology, knowledge, and skills, which can further contribute to the development of the low-income economy.

Trade agreements also aim to increase competition and consumer choice in both economies. By reducing trade barriers, it allows businesses from both sides to compete on a level playing field, leading to greater competition, innovation, and improved product quality. Consumers in both economies benefit from a wider range of choices and competitive prices.

While protecting domestic industries in the United States may be a consideration in trade agreements, it is not the primary purpose. The main objective is to foster economic growth, development, competition, and consumer choice in both economies.