If a foreign government is subsidizing its exports to your national market, what is the best policy for your government if it wants to maximize your country's net national welfare?
A) Impose widespread tariffs or quotas on imports from the offending country.
B) Impose a countervailing duty exactly equal to the subsidy to restore the pre-subsidy import price.
C) Retaliate by subsidizing your exports to exactly the same degree.
D) Impose a quota so as to keep the trade volume at the free trade level.
E) Do nothing; let the subsidized foreign exports enter your market unrestricted.
Correct Answer:
Verified
Q28: To successfully accuse a firm of predatory
Q29: Antidumping duties:
A) were banned by the GATT
Q30: Under the GATT, dumping is defined as:
A)
Q31: An export tax tends to:
A) reduce the
Q32: An export tax tends to:
A) raise the
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Q35: Relative to free trade, an export subsidy
Q36: Relative to free trade, an export tax
Q38: An export subsidy is nothing more than:
A)
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