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:

Restitution

The act of compensating for loss, damage, or injury caused; often involves the return of property to its rightful owner.

Rescind

To nullify, terminate, or abrogate a law, order, or agreement.

Contract Rescinded

The act of legally declaring a contract null and void, as if it never existed, typically due to fraud, mistake, or another reason making the contract not viable.

Covenant Not to Compete

A formal agreement where one party commits to refraining from engaging in or initiating a comparable business or occupation in rivalry with another party.