To improve the outcome of helping producers in a small nation by the targeting principle, the nation should:
A) use a production subsidy.
B) do nothing.
C) allow the market to work on its own.
D) use export subsidies.

Question

Quizplus · Accepted Answer

By providing a production subsidy, the small nation can directly target and support its producers. This can help to increase their competitiveness and output, ultimately improving their economic well-being. Doing nothing or allowing the market to work on its own may not provide sufficient support to producers, especially in a small and vulnerable economy. Export subsidies may lead to distortions in international trade and could be subject to retaliation by trading partners. Instead, a targeted production subsidy can be an effective and efficient way to support local producers.

To Improve the Outcome of Helping Producers in a Small