Homework on trade policy Assignment Example | Topics and Well Written Essays - 250 words

Homework on trade policy - Assignment Example The imports from India will have very low prices in relation to the price of rice in France. The reduction in price will tend to shut off the market for local rice thus the infant industry in France. The France economy will tend to be dependent on the rice from India. The producers are worse of while the consumers initially are enough off but are subject to risks of food insecurity and lower quality of rice. The imposition of subsidies in the production of rice in India particularly when it has a low population will tend to raise the amount of rice. The scenario will change if the population is more in that the supply of rice will tend to exceed the demand. Therefore, the surplus will tend to reduce the price of rice significantly. The issuances of lump sum amounts of cash to the farmers will not necessary imply that the funds will be in use in the production of rice. Therefore, the change in supply will not be significantly different from the amount before the issuance of the funds. The term is unlike the imposition of