Country X imports rice from the world market. Which of the following policy instruments, if adopted by its government, may result in a switch from rice being imported to being exported?

Question

Quizplus · Accepted Answer

Agricultural price support that includes the government selling any excess production to foreign buyers may result in a switch from rice being imported to being exported. This is because if the government supports the price of rice and incentivizes domestic production, then domestic producers will be encouraged to produce more rice than required for domestic consumption, leading to excess production. The government can then sell this excess production to foreign buyers, thereby turning the country from a net importer to a net exporter of rice.

Country X Imports Rice from the World Market