Direct Subsidies to Agriculture, Whether They Are Export Subsidies or Production

question 17

Multiple Choice

Direct subsidies to agriculture, whether they are export subsidies or production subsides, are viewed as harmful because of all the following reasons EXCEPT

• A) they lead to overproduction.
• B) they crowd out imports.
• C) they can lead to dumping of surplus production.
• D) they encourage overconsumption through low market prices.

---

Definitions:

Activity-Based Costing

A costing methodology that assigns the costs of resources to products or services based on the consumption of those resources.

Direct Labor-Hours

The cumulative hours spent by workers directly engaged in the production process, frequently utilized as a foundation for distributing manufacturing overhead costs across products.

Manufacturing Overhead

Indirect costs related to manufacturing, covering expenses such as maintenance, utilities, and quality control that do not directly relate to production.

Overhead Cost

Expenses related to the operation of a business that cannot be directly tied to a specific product or service, including costs like rent, utilities, and administrative salaries.