Which tool would you use to retain features from both layers and create a new dataset?

The tool used to retain features from both layers and create a new dataset is the Union tool. This tool combines two or more layers by overlaying them and preserving all features and attributes from both input layers. The resulting output dataset will include all areas of both layers, even where they overlap. This is particularly useful in spatial analysis when you want to retain all the information from both datasets without losing any data.

For example, if you have two polygon layers representing different land use types, using the Union tool would create a comprehensive dataset that reflects the combination of all land uses and their respective attributes. This provides the ability to analyze relationships and intersections between the features in a more detailed manner.

The other tools serve different purposes. The Clip tool is designed to extract features from one layer based on the boundaries of another layer, which means it does not retain features from both layers. Merge combines datasets into a single layer but does not manage overlapping features and their attributes in the same way. The Append tool is used for adding features from one layer to another, but it does not create a new dataset with the combined characteristics of both layers. Thus, Union is the best choice when the goal is to retain features from both layers and create a new dataset.