Why do countries subsidize exports when they suffer net
Welfare losses from these subsidies?
A)Exporters receiving the subsidy engage in rentseeking activities.
B)Exports generate positive externalities.
C)Exports provide foreign currency.
D)Exports provide jobs.

Question

Why do countries subsidize exports when they suffer net
Welfare losses from these subsidies?
A)Exporters receiving the subsidy engage in rent­seeking activities.
B)Exports generate positive externalities.
C)Exports provide foreign currency.
D)Exports provide jobs.

Quizplus · Accepted Answer

Countries may subsidize exports because exporters receiving the subsidy engage in rent-seeking activities, lobbying for subsidies that benefit them even if it results in net welfare losses for the country.

Why Do Countries Subsidize Exports When They Suffer Net