|Consider the following statements regarding the subsidy provision by WTO.|
|1. All subsidies, which are supposed to distort production and trade fall into the Amber box.|
|2. Green box subsidies are known as Amber box with conditions.|
|3. Any subsidy that would normally be in the Amber box, is placed in the Blue box if it requires farmers to go for a certain production level.|
|Which of the statements given above are correct?|
A) 1 and 3
B) 2 and 3
C) 1 and 2
D) All of these
Correct Answer: A
Solution :[a] It is the blue Box, which is known as Amber box with conditions, because of the explanation given in Statement 3. Generally, Green box subsidies are agricultural subsidies, which cause minimal or no distortions to trade. They must not involve price support.
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