The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods, effectively acting as a quota of zero imports when stimulus money was being spent.In the U.S.steel market, the "Buy American" provision in the 2009 stimulus package would
A)convert some consumer surplus to deadweight loss.
B)transfer some deadweight loss to producer surplus.
C)transfer some producer surplus to consumer surplus.
D)reduce the producer surplus received by foreign manufacturers.

Question

Quizplus · Accepted Answer

The "Buy American" provision would reduce imports, which would increase the price of steel in the U.S. This would convert some consumer surplus to deadweight loss.

The "Buy American" Provision in the 2009 Stimulus Package Required