Suppose, in the United States, each farmer is given a federal agricultural subsidy worth $30,000 . What will be the effect of such subsidy?
a. It discourages domestic agricultural production.
b. It allows U.S. farmers to sell their products for lower prices in foreign markets.
c. It gives foreign producers an unfair cost advantage.
d. It increases the amount of agricultural imports into the United States.
e. It reduces the prices of the primary products in the U.S. market.
b
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Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements is TRUE?
A) Washington has an absolute advantage in the production of both pecans and pears. B) Washington has a comparative advantage in the production of both pecans and pears. C) Washington has a comparative advantage in producing pecans and Missouri has a comparative advantage in producing pears. D) Both answers A and C are correct.
A decrease in real GDP would affect the U.S. economy by:
a. cutting tax revenues and raising government expenditures. b. cutting government expenditures and raising tax revenues. c. raising both tax revenues and government expenditures. d. cutting both government expenditures and tax revenues.