Question An export subsidy raises domestic prices for the product, so, for an export subsidy to be successful: /> A.) domestic demand for the product must be inelastic. B.) foreign demand for the product must be inelastic. C.) there must be some mechanism in place to keep domestic consumers from buying the product on the international market. D.) the WTO must approve the export subsidy. (My guess is D based on the WTO’s stance on export subsidies, specifically, agricultural export subsidies)
Question
An export subsidy raises domestic prices for the product, so, for an export subsidy to be successful: />A.) domestic demand for the product must be inelastic.B.) foreign demand for the product must be inelastic.C.) there must be some mechanism in place to keep domestic consumers from buying the product on the international market.D.) the WTO must approve the export subsidy.
(My guess is D based on the WTO’s stance on export subsidies, specifically, agricultural export subsidies)
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