An Export Subsidy Has a Similar Effect as a Tariff

question 121

Multiple Choice

An export subsidy has a similar effect as a tariff for a small nation. What is the effect of an export subsidy for a large nation?

• A) Losses are greater for the large nation than for the small nation because of the cost of the subsidy to the home government.
• B) Losses are lower for the large nation than for the small nation.
• C) It is beneficial for the large nation but not for the small nation.
• D) It is beneficial for consumers but harmful for firms in the large nation.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.