V4

Suppose that the European Union decides to reduce its agricultural export subsidy (The Common Agricultural Policy). Overall, will the EU gain or lose in welfare? A. The EU will gain if its termsoftrade gains exceed the reduction in its deadweight losses. B. The EU will lose if its termsoftrade losses exceed the reduction in its deadweight losses. C. The EU will always gain by reducing its subsidies. D. The EU will always lose by reducing its subsidies. E. The EU will gain if the reduction in its deadweig ht losses exceeds its termsof-trade gains