Why should I choose AnalystNotes?

Simply put: AnalystNotes offers the best value and the best product available to help you pass your exams.

Find out more

Basic Question 8 of 17

Which trade policy will increase producer surplus?

I. Tariff
II. Import quota
III. Export subsidy
IV. VER
Check Answer Previous Q Next Q Print

User Contributed Comments 3

User Comment
something Can someone explain how III. Export subsidy and VER work out in this case, same as question as previous question on consumer surplus.
syazwan21 Well Export subsidy will shift the supply curve to the left, effectively decreasing consumer surplus and increasing producer surplus at the expense of the government.

VER is similar to quota but the tab is picked up by the exporting government instead of the importing one. This also shifts supply curve to the left.
chesschh export subsidy encourages exports of goods thus increase producer surplus.
voluntary export restraint is telling that other countries will restrain from exporting which increases domestic demand
You need to log in first to add your comment.
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach

Andrea Schildbach

Learning Outcome Statements

compare types of trade restrictions, such as tariffs, quotas, and export subsidies, and their economic implications

CFA® 2024 Level I Curriculum, Volume 1, Module 6.