Subsidization of aircraft industries in the United States and Europe has become a competitive situation and very costly because of escalation. Therefore, in 1992:
A) the United States and the European Union agreed to merge Boeing, Airbus, and McDonnell-Douglas and share the profits.
B) the United States and the European Union agreed to limit development subsidies on aircraft to 33% of the total developmental costs.
C) the United States refused to budge because of its heavy defense needs.
D) Airbus needed more help because it is run by a consortium of firms in three European nations.

Question

Quizplus · Accepted Answer

The United States and the European Union agreed to limit development subsidies on aircraft to 33% of the total developmental costs in 1992 to address the competitive and costly situation of subsidization in the aircraft industries. This agreement aimed to level the playing field and reduce the harmful effects of excessive subsidization on both sides of the Atlantic. Option A is not correct because there was no agreement to merge Boeing, Airbus, and McDonnell-Douglas. Option C is not true because the United States did agree to limit development subsidies. Option D may be partly true, but it does not provide a complete and accurate explanation for the 1992 agreement.

Subsidization of Aircraft Industries in the United States and Europe