7
QuizMultiple Choice

Trade Agreements

Question 7 • * HSA 26-27 US Government

Which of these is a positive incentive for domestic producers?

Answer
A
a subsidy on imported cars
B
a tariff on cars
C
a subsidy on domestic oranges
D
a tariff on clothes

Explanation

A subsidy is financial support that lowers producers’ costs or boosts their income, encouraging them to produce more. A subsidy on domestic oranges directly benefits domestic producers. A tariff on cars or clothes may protect domestic producers from foreign competition, but it is not a direct positive incentive to produce a particular domestic good; a subsidy on imported cars benefits importers or foreign producers instead.

AI-written and checked against the verified answer.

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