An Export Subsidy Will Cause the Relative Demand for ________

question 46

Multiple Choice

An export subsidy will cause the relative demand for ________ to ________ and the relative supply for ________ to ________.

• A) exports; decrease; exports; increase
• B) imports; decrease; imports; increase
• C) imports; increase; imports; decrease
• D) exports; increase; exports; decrease
• E) exports; increase; imports; decrease

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Definitions:

Trade Surplus

A situation where a country exports more goods and services than it imports.

Exports

Goods or services produced in one country and sold to buyers in another, contributing to a country's gross domestic product.

Imports

Items or services acquired from overseas to be sold within a country.

Balanced Trade

A situation in which the value of a country's exports equals the value of its imports over a certain period.