An export subsidy will cause the relative demand for ________ to ________ and the relative supply for ________ to ________.
A) exports; decrease; exports; increase
B) imports; decrease; imports; increase
C) imports; increase; imports; decrease
D) exports; increase; exports; decrease
E) exports; increase; imports; decrease

Question

Quizplus · Accepted Answer

An export subsidy makes exports cheaper for foreign buyers, increasing the demand for exports. It also increases the supply of exports as domestic producers are encouraged to produce more for export.

An Export Subsidy Will Cause the Relative Demand for ________