If a large nation subsidizes its exports, it will increase its supply to the world and:
A) will prosper through increased jobs for workers and profits for its firms.
B) the world price will fall.
C) consumers in the home nation will benefit through lower prices.
D) the nation will increase its imports as well.

Question

Quizplus · Accepted Answer

Subsidizing exports increases the supply of goods to the world market, which typically leads to a decrease in the world price of those goods due to the principles of supply and demand.

If a Large Nation Subsidizes Its Exports, It Will Increase