Question

how do subsidies act as barriers to trade? * 1 point
subsidies artificially lower the cost of producing domestic goods.
subsidies artificially increase the price of imported goods
subsidies impose a limit on the amount of foreign goods that can be imported
what effect do protectionist barriers to trade have on the productivity of the global economy? * 1 point
they increase global economic productivity because they protect fledgling industries from competition.
they decrease global economic productivity because they restrict the ability of countries to exploit their comparative advantages
they decrease global economic productivity because they cause monopolies to develop in domestic industries

Explanation:

Subsidies are payments by the government to domestic producers. They lower the cost of production for domestic firms, giving them an unfair advantage over foreign - produced goods, acting as a trade barrier. Protectionist barriers limit free trade. Countries have different comparative advantages, and free trade allows them to specialize. Protectionism restricts this specialization, thus decreasing global economic productivity.

Answer:

1. A. Subsidies artificially lower the cost of producing domestic goods.
2. B. They decrease global economic productivity because they restrict the ability of countries to exploit their comparative advantages.