Question

In order to encourage the agricultural industry, the French government provided low-interest loans for the purchase of seeds and fertilizers. The government also gave cash grants and made tax reductions. Which instrument of trade policy is being used by the French government?
a. tariffs
b. voluntary export restraints
c. subsidies
d. local content requirements
e. import quotas

Answer 1

Answer:

c. subsidies

Explanation:

Based on the scenario it can be said that the instrument of trade policy that is being used by the French Government are known as subsidies. These are government incentives that are given as a form of financial aid to an economic sector. This is given for the main purpose of increasing economic and social policy within that sector. Such as the French Government wants to do with the agricultural industry in this scenario.