Industrial policies intended to foster comparative advantage for domestic industries could result in the implementation of ?
Correct answer: D. All of the above
- A. research and development subsidies
- B. loan guarantees
- C. low interest rate loans
- D. All of the above
Explanation
Governments seeking to build domestic comparative advantage may subsidize research and development, guarantee loans, or offer loans at below-market interest rates. Therefore all three listed instruments qualify.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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