A "Buy American" provision in the 2009 stimulus bill would ________ consumer surplus and ________ producer surplus for industries that produce protected products in the United States.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Question

Quizplus · Accepted Answer

The "Buy American" provision would likely decrease consumer surplus due to higher prices from reduced competition, while increasing producer surplus for domestic industries due to reduced foreign competition and increased demand for their products.

A "Buy American" Provision in the 2009 Stimulus Bill Would