If Honduras were to subsidize the production of wool blankets and sell them in Sweden at artificially low prices, the Swedish economy would be worse off.

Question

Quizplus · Accepted Answer

Subsidizing the production of wool blankets in Honduras and selling them at artificially low prices in Sweden could potentially benefit Swedish consumers through lower prices and increased choice, although it may negatively impact local Swedish producers who cannot compete with the subsidized prices. The overall effect on the Swedish economy would depend on the balance between consumer gains and producer losses.

If Honduras Were to Subsidize the Production of Wool Blankets