When Exports Are Subsidized, _____

question 93

Multiple Choice

When exports are subsidized, _____.

• A)income is transferred from tax payers to the exporters of subsidized goods
• B)the amounts of actual labor, raw material, and capital costs of production decrease
• C)nations export products in which they have a comparative advantage
• D)gains from trade in terms of world output increase
• E)nations export products in which they have an absolute advantage

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Definitions:

Market Value

The current price at which an asset or service can be bought or sold in the open market.

Expensed

The process of recording costs as expenses in the income statement in the period in which they are incurred.

Direct Materials

Raw materials that are directly traceable to the production of a specific product and include in its cost.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead costs to products based on a specific activity base.