Which of the following is a benefit of world trade agreements?

• A. They discourage foreign investment.
• B. They reduce trade barriers between countries.
• C. They increase tariffs on imported goods.
• D. They limit the number of countries allowed to trade.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the purpose of world trade agreements. These agreements are designed to facilitate international trade by creating rules and reducing obstacles between countries.
2. Step 2: Identify common trade barriers that world trade agreements aim to reduce, such as tariffs (taxes on imports), quotas (limits on quantities), and other restrictions that make trade more difficult or expensive.
3. Step 3: Recognize that reducing trade barriers encourages more trade between countries, which can lead to economic growth, increased efficiency, and access to a wider variety of goods and services.
4. Step 4: Evaluate the given options by comparing them to the known goals of trade agreements. For example, discouraging foreign investment or increasing tariffs contradict the purpose of promoting trade.
5. Step 5: Conclude that the correct benefit of world trade agreements is that they reduce trade barriers between countries, thereby promoting smoother and more extensive international trade.