Because export subsidies tend to result in domestic exporters charging lower prices on their goods sold overseas, the home country's

Name: Because export subsidies tend to result in domestic exporters charging lower prices on their goods sold overseas, the home country's
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Question

Quizplus · Accepted Answer

When a country uses export subsidies, it leads to a decrease in the prices of its goods sold overseas, which ultimately reduces the terms of trade. Therefore, the correct answer is option C, i.e., the terms of trade will worsen.

Because Export Subsidies Tend to Result in Domestic Exporters Charging