Subsidies to domestic producers

• What are the two ways subsidies can influence international trade?

  Export subsidies and subsidies to reduce imports
• What is the purpose of subsidies to reduce imports?

  To encourage domestic consumption of local products
• How can businesses increase their output and lower prices?

  By improving efficiency and reducing production costs
• What is the effect of lower prices on goods/services in an international market?

  It makes them more competitive internationally
• What happens to the level of exports when prices are lower?

  The level of exports increases
• What is a potential outcome of increased output in terms of employment?

  It may result in increased domestic employment
• How can businesses increase their output and lower prices?

  By improving efficiency and reducing production costs
• What is the effect of lower prices on goods/services in an international market?

  It makes their goods/services more competitive internationally
• example of trade subsidies given by countries?


  2018 Brazil gave 2.5 billion USD to the domestic sugar industry