O Levels Economics (2281)•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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