An important factor to consider when a nation considers
Subsidies for export promotion is whether:
A)the firms will follow through on their plans.
B)costs will rise or fall.
C)the subsidy and continued support will force foreign firms out of the market.
D)the government can afford to do it.

Question

Quizplus · Accepted Answer

Subsidies for export promotion can often lead to unfair competition with foreign firms and could ultimately force them out of the market, which can have negative consequences for international trade relations. Additionally, even if the firms follow through on their plans, the costs of production may not necessarily decrease, and the government's ability to afford the subsidy may be a limiting factor. Therefore, it is important to consider the potential negative consequences of the subsidy on the broader market dynamics.

An Important Factor to Consider When a Nation Considers