When Assessing the Welfare Effect of an Export Subsidy on a Small

question 146

Multiple Choice

When assessing the welfare effect of an export subsidy on a small nation, it can be shown that the subsidy:

• A) increases national welfare.
• B) can be paid for out of increased revenues.
• C) hurts producers and helps consumers.
• D) is just the same as a tariff on imports: it raises domestic price, increases domestic production, and involves the same efficiency and consumption losses.

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Definitions:

Reporting Entity

A reporting entity refers to any business, organization, or unit that has legal and economic responsibilities to report its financial and operational data.

Peak Load Demand

The maximum amount of power or resources required at a specific time or period.

Car Dealers

Businesses authorized to sell new or used cars and often offer maintenance services, warranty repairs, and financing options.

Rebates

Partial refunds to consumers after the purchase of a product, often used as a marketing strategy to increase sales.