Is an export subsidy a good way for a large nation to help a poor nation by exporting products to them at lower prices?
A) Yes, and it is a method recommended by the WTO.
B) It can help in some cases.
C) No; it creates inefficiency in production and it hurts firms (especially small farmers) in importing countries who cannot compete with subsidized imports.
D) Yes; but it can get tricky when the importers demand even more quantity at lower prices.

Question

Quizplus · Accepted Answer

Export subsidies can create inefficiencies in production and hurt domestic firms in the importing country who cannot compete with subsidized imports. This can have negative effects on local farmers and small businesses. Furthermore, the World Trade Organization (WTO) has recommended against the use of export subsidies as they distort global trade and ultimately lead to higher prices for consumers.

Is an Export Subsidy a Good Way for a Large