AllMetal Corp., based in Houston, believes the ideal way for the United States to respond when foreign competitors are already being supported by government subsidies is not to retaliate but to establish rules that help minimize trade-distorting subsidies. Which theorist does AllMetal's management agree with?

Question

Quizplus · Accepted Answer

Paul Krugman is known for his work on international trade theory, including the idea that governments should establish rules to minimize trade distortions rather than retaliate with subsidies or tariffs.