What purpose do financial incentives serve?
a) they act as trade barriers.
b) they limit imports.
c) they set standards.
d) they restrict all trade.

The correct answer is A.

When financial incentives are granted to domestic producers, these would be able to offer a product or service at a lower cost than without the monetary injection. Therefore, these domestic firms will be operating with more favourable conditions than foreign competitors in the national markets, which means that those financial incentives are acting as a trade barrier.