Question

Please help this is due today. A country currently exports 1 million tons of lumber to the rest of the world. If the government were to impose an exports subsidy on lumber, which of the following correctly explains the expected result?
A. The subsidy will increase exports of lumber because it will effectively lower lumber prices for consumers and raise them for producers.


B. The subsidy will increase exports of lumber because it will effectively raise lumber prices for both domestic consumers and domestic producers.


C. The subsidy will decrease exports of lumber because it will effectively raise lumber prices for both domestic consumers and domestic producers.


D. The subsidy will decrease exports of lumber because it will effectively lower lumber prices for consumers and raise them for producers.

Answer 1

Answer:A

Explanation: