1

How much of the earth's surface is covered (with - in - by - at)forest? - About 20%.

I think both "with" and "by" could be correct answers for this question. Is there best option here?

2

Covered with means that the forest is the thing that is covering the area referred to, and it could imply that someone actually carried out the action of planting it there.

For example:

The cake was iced with cream.

The cream is the thing that has been put onto the cake, but it has obviously been put there by somebody.

Covered by infers that the subject of the sentence (in this case the forest) actually did the covering, which may be appropriate if the trees just grew there naturally without being planted.

For example:

The cake was iced by the baker.

And of course logically you would say:

The cake was iced with cream by the baker.

If you want to imply that the forests covering 20% of the earth are naturally occurring and not deliberately planted there, you should use "by".

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