Suppose that the United States decided to subsidize a major competitive effort by the semiconductor industry to bring to market the next generation computer chip.Under the current rules of the WTO and GATT,the U.S.effort is
A)allowed as long as the subsidies are a small percent of the total cost.
B)allowed as long as the subsidies do not involve a direct payment to the industry.
C)not allowed.
D)neither allowed nor disallowed.
E)allowed as long as the subsidies do not succeed in creating a new product.

Question

Quizplus · Accepted Answer

According to the rules of the WTO and GATT, subsidies that are designed to create an unfair advantage for domestic industries and distort international trade are not allowed. Subsidizing the semiconductor industry to bring a new product to market would likely be seen as a violation of these rules, as it would give the industry an unfair advantage over foreign competitors.

Suppose That the United States Decided to Subsidize a Major