It’s a trait left over from before humans lost all of their body hair. The goosebumps form as a result of tiny muscles in your skin trying to make the hairs on your skin stick up, which when cold helps to create a layer of insulating air to reduce heat loss, and when scared helps to make you look larger and more threatening to any potential predators. Both of these aren’t particularly effective in humans because of our lack of significant body hair, but there wasn’t any evolutionary incentive to get rid of them so they just stuck around.
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