California Teacher Credentialing Examination (CSET) Practice Test 2026 - Free CSET Practice Questions and Study Guide

High taxation and inflation significantly hindered trade in the Roman Empire and contributed to its economic decline. As the government imposed higher taxes to fund military campaigns and public projects, the burden fell heavily on merchants and farmers. This caused a decline in disposable income and reduced spending, which negatively impacted trade activity. Furthermore, inflation eroded the value of currency, leading to a lack of confidence in monetary transactions and making it difficult for traders to establish fair prices. The combined effects of high taxation and inflation created an unstable economic environment, ultimately stunting trade growth and contributing to the overall decline of the Roman economy.

Increased agricultural production did not directly hinder trade; rather, it could potentially improve the economy by providing more goods for trade. A strong military presence might typically secure trade routes, although it could also lead to higher taxes for defense spending. The expansion of territory, while it could initially bolster trade by increasing access to resources and markets, often resulted in overextension and resource strain, which could also negatively affect the economy if not managed properly.