What is the purpose of the 1935 Interstate Oil Compact among oil-producing states?

• A. Ban foreign oil
• B. Create a single national oil company
• C. Exchange information and standardize legislation
• D. Raise taxes on oil

Answer: (C)

The main idea being tested is how governments coordinate regulation of a natural-resource industry across state lines. In 1935, oil-producing states formed an agreement to work together by sharing industry information and aligning their laws so that oil production could be regulated more consistently across states. This kind of information exchange and standardization helps stabilize the market, reduce harmful competition between states, and ensure a more predictable regulatory environment for producers.

That’s why the best answer is the one that describes exchanging information and standardizing legislation. It directly reflects the goal of creating coordinated, uniform rules rather than pursuing broader aims like banning foreign oil, creating a single national oil company, or raising taxes.