Subsidies are payments made by the government of a country to:
a. foreign firms to encourage imports.
b. foreign firms to encourage domestic exports.
c. domestic firms to encourage exports.
d. domestic firms to encourage imports.
e. domestic firms to ensure domestic consumption of their goods.
c
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The purchasing power of money decreases as the
A) demand increases. B) employment increases. C) price level increases. D) production decreases.
When a country that exported a particular good abandons a free-trade policy and adopts a no-trade policy,
a. producer surplus increases and total surplus increases in the market for that good. b. producer surplus increases and total surplus decreases in the market for that good. c. producer surplus decreases and total surplus increases in the market for that good. d. producer surplus decreases and total surplus decreases in the market for that good.