In the Brander-Spencer Model the Subsidy Raises Profits by More

question 1

Multiple Choice

In the Brander-Spencer model the subsidy raises profits by more than the subsidy because of

• A) the "multiplier" effect of government expenditures.
• B) the military-industrial complex.
• C) the forward and backward linkage effects of certain industries.
• D) the deterrent effect of the subsidy on foreign competition.
• E) the economies of scale once the company enters the market.

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Definitions:

Highly Discrepant

Referring to something that significantly differs or deviates from the norm or from expectations.

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The existing state of affairs or current condition.

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