Trade Theory Suggests That Japan Would Gain from a Subsidy

question 44

Multiple Choice

Trade theory suggests that Japan would gain from a subsidy the United States provides its grain farmers if the gains to Japanese consumers of wheat products more than offsets the losses to Japanese wheat farmers. This would occur as long as Japan

• A) is a net importer in bilateral trade flows with the United States.
• B) is a net importer of wheat.
• C) has a comparative advantage in wheat.
• D) has an absolute advantage in producing wheat.
• E) is involved in intra-industry trade with the United States.

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