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O Levels Economics (2281)•2281/12/M/J/20
Question 27 from 2281/12/M/J/20

Explanation

Subsidies enhance export competitiveness

Steps:

  • Identify protectionist measures: government actions to shield domestic industries from foreign competition.
  • Analyze goal: support export growth by making domestic products more attractive abroad.
  • Evaluate each option: determine if it aids exports or restricts imports.
  • Select measure: choose one that lowers costs for producers to boost sales overseas.

Why C is correct:

  • Subsidies provide direct financial aid to producers, reducing costs and enabling lower export prices to compete globally.

Why the others are wrong:

  • A. Embargo bans all trade with a country, halting exports entirely.
  • B. Quota limits import quantities, protecting domestic sales but not aiding exports.
  • D. Tariff taxes imports to raise foreign prices, shielding local markets without export support.

Final answer: C

Topic: Globalisation, free trade and protection

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