Multiple Choice
Starting from a position of free trade, export subsidies will:
A) Always increase domestic national welfare.
B) Sometimes increase domestic national welfare.
C) Never increase domestic national welfare.
D) Always increase national welfare if lost consumer surplus is compensated by an equivalent tax relief financed from increased producer surplus.
E) Always increase national welfare if lost producer surplus is compensated by an equivalent tax relief financed from increase consumer surplus.
Correct Answer:
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