CFA Practice Question

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CFA Practice Question

Which trade policy will increase producer surplus?

I. Tariff
II. Import quota
III. Export subsidy
Correct Answer: All of them

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
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