What type of agency is created by a formal agreement between two or more governments?

The correct choice highlights that an Intergovernmental Organization (IGO) is established through formal agreements between two or more governments. These organizations typically address issues that transcend national boundaries, such as trade, security, and environmental concerns, facilitating cooperation among member states.

IGOs operate based on treaties or agreements, which define their missions, governance structures, and membership criteria. The United Nations is a prominent example of an IGO, as it was formed by multiple countries to promote peace, security, and development across the globe.

In contrast, the other options refer to different types of entities. Non-Governmental Organizations (NGOs) operate independently of governments and focus on various social issues, while Private Sector Agencies are involved in business and commerce. Therefore, the focus on formal agreements among governments makes Intergovernmental Organizations distinct and the correct answer in this context.