it is because if it were square, circular or even triangular, there would be less space for us to write on. furthermore, as paper is mass-produced, it would be easier to create rectangular paper than other shaped papers. Plus, as printers, scanners and photocopying machines are all already built to print on rectangular paper, it would be troublesome to change the shape of paper.
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A rectangular prism has 8 vertices whereas rectangular based pyramid has 5 vertices
There is no specific reason, actually. Also, I know at least one flag does not; look up Ohio's flag. (alternate answer) Rectangles are a convenient shape to work with. You might also ask why pieces of paper are rectangular, books are rectangular, newspapers and magazines are rectangular, candy bars are rectangular, and so forth. It would be trickier to make pentagonal flags. Why give yourself extra work? Switzerland's flag is a square rather than a country; I think they had to get special permission for this. Rectangular flags appear to be golden rectangles which are said to look nicer, so perhaps this has something to do with it.
Rectangular cuboid
both are a rectangular