Trade theory suggests that Japan would gain from a subsidy the United States provides its grain farmers if the gains to Japanese consumers of wheat products more than offsets the losses to Japanese wheat farmers. This would occur as long as Japan
A) is a net importer in bilateral trade flows with the United States.
B) is a net importer of wheat.
C) has a comparative advantage in wheat.
D) has an absolute advantage in producing wheat.
E) is involved in intra-industry trade with the United States.
B
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When discussing pass through effects, it is fair to say
A) that the degree of pass through varies across nations, time and industries. B) that the degree of pass through varies across nations. C) that the degree of pass through varies across time and industries. D) that the degree of pass through varies across industries.
Asymmetric information in a transaction can result in:
A. moral hazard. B. a lemons problem. C. adverse selection. D. All of these statements are true.
Is it possible for a country to run a trade deficit and yet have the value of its currency not change? Use a supply and demand model of a foreign exchange market to explain how this could occur.
What will be an ideal response?
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential