If a rich country reduced subsidies to domestic producers who produce goods for which poor countries have a comparative advantage,the standard of living in these poor countries would likely rise.

Question

Quizplus · Accepted Answer

By reducing subsidies to domestic producers, the cost of production for goods for which poor countries have a comparative advantage would increase in the rich country, making it less competitive in the global market. This would lead to an increase in demand for these goods from poor countries, ultimately raising their standard of living as they benefit from increased trade and income.

If a Rich Country Reduced Subsidies to Domestic Producers Who