Which of the following best explains how subsidies work as a trade restriction? A)They increase competition for a new business, forcing it to be more productive, and lowering prices for consumers. B)They limit the import of foreign goods and create shortages. C)They place a tax on foreign goods, making foreign good expensive, increasing demand for domestic goods(this one is wrong) D)Governments pay producers, offsetting costs, increasing supply, lowering prices, and reducing foreign competition.
Which of the following best explains how subsidies work as a trade restriction? A)They increase competition for a new business, forcing it to be more productive, and lowering prices for consumers. B)They limit the import of foreign goods and create shortages. C)They place a tax on foreign goods, making foreign good expensive, increasing demand for domestic goods(this one is wrong) D)Governments pay producers, offsetting costs, increasing supply, lowering prices, and reducing foreign competition.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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In the picture below is the full question. The highlighted one is my guess which is wrong.
Which of the following best explains how subsidies work as a trade restriction?
A)They increase competition for a new business, forcing it to be more productive, and lowering
B)They limit the import of foreign goods and create shortages.
C)They place a tax on foreign goods, making foreign good expensive, increasing demand for domestic goods(this one is wrong)
D)Governments pay producers, offsetting costs, increasing supply, lowering prices, and reducing foreign competition.
Transcribed Image Text:Which of the following best explains how subsidies work as a trade restriction?
They increase competition for a new business, forcing it to be more productive, and lowering prices for consumers.
They limit the import of foreign goods and create shortages.
They place a tax on foreign goods, making foreign good expensive, increasing demand for domestic goods
Governments pay producers, offsetting costs, increasing supply, lowering prices, and reducing foreign competition.
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