This is part of a series of TOEFL Reading Question Types. In today’s post, we will discuss a "Reference" question. In a "Reference" question, you are asked what the highlighted word refers to. If it's a pronoun then you need to identify what word the pronoun is replacing.
Let’s see an example of a reference question:
 Economic contact between Native Americans and Europeans can be traced back to the English and French fishermen off the coast of Canada in the 1500s. They traded guns and other weapons for beaver fur. The first explorers to trade with the Native Americans were Giovanni da Verrazano and Jacques Cartier in the 1520s and 1530s. In Verrazano's book he notes, "If we wanted to trade with them for some of their things, they would come to the seashore on some rocks where the breakers were most violent while we remained on the little boat, and they sent us what they wanted to give on a rope, continually shouting to us not to approach the land."
Question: The word 'They' in paragraph 3 refers to ?
D. traits and characteristics
The answer is D
C is the correct answer. It is referring to who traded guns and other weapons for beaver fur. A and B are in the passage but do not trade for beaver fur. D is also European so C is more correct.