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Assume that Home country is an exporter of cars and importer of soybeans. Foreign country, on the other hand, is an exporter of soybeans and
Assume that Home country is an exporter of cars and importer of soybeans. Foreign country, on the other hand, is an exporter of soybeans and importer of cars. a. How does an export subsidy imposed by the foreign government impact the terms of trade of the Home country? Explain and use a graph. b. How does a tariff imposed by the foreign government impact the terms of trade of the Home country? Explain and use a graph.
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