One of the Negative Impacts of Export Subsidy Is That

question 68

Multiple Choice

One of the negative impacts of export subsidy is that:

• A)the price of the domestic good increases in the world market.
• B)the domestic supply of the goods increases more than proportionately than increase in demand.
• C)the domestic cost of production of the exportable increase.
• D)it results in a general deflation and hence the domestic producers incur losses.
• E)the domestic consumers are harmed as the subsidies are financed by taxing them.

Understand the rationale and consequences of the Budget Enforcement Act of 1990.

Recognize the implications of large government budget deficits on the economy and interest rates.

Understand and apply the concept of Net Present Value (NPV) to evaluate investment projects.

Analyze and compare projects using the Internal Rate of Return (IRR) method.

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Definitions:

Synthetic Oil

A lubricant consisting of chemical compounds that are artificially made (synthesized) from base chemicals rather than whole crude oil.

Mineral Base Lube

A lubricant derived from mineral oils, used for a variety of applications including engines and machinery for reducing friction.

Incompatible Additives

Chemicals that when mixed with others in vehicle fluids can cause negative reactions or degrade the performance of the fluid.

Differential Carriers

Components that hold the differential gearing in vehicles, allowing wheels to rotate at different speeds.