A country wants to help its corn farmers compete with foreign competitors. It starts a program that gives government money to every corn farmer in the country. The extra money lets the farmers charge less for their corn at the market, making it less expensive than imported corn.This is an example of which type of trade barrier?A.SubsidiesB.EmbargoesC.TariffsD.Quotas
Question
A country wants to help its corn farmers compete with foreign competitors. It starts a program that gives government money to every corn farmer in the country. The extra money lets the farmers charge less for their corn at the market, making it less expensive than imported corn.This is an example of which type of trade barrier?A.SubsidiesB.EmbargoesC.TariffsD.Quotas
Solution
This is an example of A. Subsidies.
Here's why:
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Subsidies are financial assistance provided by the government to a business or economic sector. The purpose of subsidies is to lower the cost of production, allowing producers to sell their goods at a lower price. In this case, the government is giving money to corn farmers, allowing them to sell their corn at a lower price.
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Embargoes are a ban on trade with a particular country. This is not the case here as the government is not banning trade with any country.
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Tariffs are taxes imposed on imported goods. This is not the case here as the government is not imposing any tax on imported corn.
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Quotas are a limit on the amount of a particular product that can be imported. This is not the case here as the government is not limiting the amount of corn that can be imported.
So, the correct answer is A. Subsidies.
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