Suppose that the United States decided to subsidize a major competitive effort by the semiconductor industry to bring to market the next generation computer chip.Under the current rules of the WTO and GATT,the U.S.effort is
A)allowed as long as the subsidies are a small percent of the total cost.
B)allowed as long as the subsidies do not involve a direct payment to the industry.
C)not allowed.
D)allowed as long as the subsidies do not succeed in creating a new product.

Question

Quizplus · Accepted Answer

The current rules of the WTO and GATT do not allow subsidies that distort international trade and give unfair advantages to domestic companies at the expense of foreign competitors. Subsidizing a major competitive effort by the semiconductor industry would likely be seen as an unfair trade practice and could lead to trade disputes with other countries. Therefore, option C is the correct answer.

Suppose That the United States Decided to Subsidize a Major