The impact on world welfare of an export subsidy and a countervailing duty (of the same size as the subsidy) is:
A)zero.
B)negative due to overproduction.
C)negative due to under-consumption.
D)negative due to deadweight loss.

Question

Quizplus · Accepted Answer

An export subsidy and a countervailing duty of the same size cancel each other out, resulting in no impact on world welfare.

The Impact on World Welfare of an Export Subsidy and a Countervailing