Governments sometimes subsidize domestic industries. When this occurs
A) the governments will not impose tariffs.
B) the subsidized sell less in international markets because it is more profitable to sell at home.
C) the subsidized industries have an advantage on international markets relative to non-subsidized firms. For this reason, other countries often impose tariffs on the subsidized imports.
D) the subsidized industries have an advantage on international markets relative to nonsubsidized firms. However, this is not an argument for imposing tariffs and tariffs would violate international agreements.
C
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Assuming full employment, if the private sector saves 8 percent of its income and the government raises taxes by $500 to finance public investments, total investment will increase by $460
Indicate whether the statement is true or false
Which of the following will lead to a change in the opportunity cost of buying a pen and a pencil?
A) An increase in the consumer's income B) A decrease in the consumer's income C) A twofold increase in the prices of both pens and pencils D) A twofold increase in the price of pens and a threefold increase in the price of pencils