Answer:
D. Creating trade agreements
This economic system is called<em> socialism.</em>
Socialism is an economic system where everyone in the society equally owns the factors of production. The ownership as such is in the hands of the<em> government</em> that controls all means of production and distribution of goods.
The factors of production are : land, labor, capital and entrepreneurship.
In a socialistic economy, the land is owned by the state and private property is limited and difficult to obtain. Labor is heavily regulated and most people are employed in state-owned companies. Workers do not have many rights and they have to obey the government which also decides what is being produced and in which capacity ( planned economy ).
Socialism does not reward people for being entrepreneurial and competitive as competition is no existing and everybody reaps the same benefits of their work.
The correct answer is: "they started trading with neighboring communities".
The first stage of an agricultural society is characterized by a subsistence agricultural economy, in which everybody in the community contributes to production activities. Once they are able to develop better farming techniques, the amount produced increases and production surpluses are generated. These surpluses are the amount that is not necessary for self-subsistence and that can be traded in exchange for other commodities.
When trade steps in, it means that there are different types of products in the economy. Division of labor and speacialization appear at this point, when different tasks need to be done to produce each good, and different people work on each of them. Some people continue doing the agricultural work, others are in charge of the trading activities, and some others become artisans which construct tools that continue improving the production techniques and generating more surpluses.
