The answer to the question of whether the export subsidy would make domestic producers sell steel to domestic consumers and sell the rest abroad is:
- False because the domestic producers would not want to sell at a lesser price than what they would have sold abroad.
<h3>What is Export Subsidy?</h3>
This refers to the government policy which is meant to discourage export of goods with the aim of regulating the economy which usually leads to the increase in the amount of customer surplus in the market.
With this in mind, we can see that the export subsidy has to do with the increase in domestic price whereby there is a higher cost for exports for producers.
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Answer:
C Protection against inflation
Explanation:
As we know that there are three functions of money i.e.
1. Unit of account
2. Store of value
3. Medium of exchange
There is only 3 functions of money that are shown above
So the protection against inflation would not be considered for the same
And, these 3 would represent the functions of money and can be treated as the unit of account, store of value and the medium of exchange
Hence, the option c is correct
It is true that because of the substitution problem, the CPI tends to overstate the true change in the price of the typical basket of consumer goods.
<h3>What is CPI?</h3>
- A consumer price index measures a market basket of goods and services that households have purchased at a weighted average price.
- The measured CPI fluctuates to reflect changes in prices over time.
- One of the most popular methods for determining inflation and deflation is the CPI.
- An essential gauge of an economy's health is inflation. The CPI and other indexes are used by governments and central banks when making economic decisions.
- The decision to raise or cut interest rates is crucial among these.
- If the CPI increases, it indicates that the average rate of change in price over time has increased. The cost of living and income are eventually changed as a result of this.
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