One World View article titled "EU Farm Subsidies" reports,"… France,Germany,and Switzerland all shield their farmers from international competition while subsidizing their exports." Which of the following shifts for agricultural products in international markets shows the effect of export subsidies?
A)The supply curve shifts to the right.
B)The demand curve shifts to the right.
C)The supply curve shifts to the left.
D)The demand curve shifts to the left.

Question

Quizplus · Accepted Answer

Export subsidies decrease the cost of production for domestic producers which leads to an increase in supply. As a result, the supply curve shifts to the right, representing an increase in the quantity supplied at each price level.

One World View Article Titled "EU Farm Subsidies" Reports,"… France,Germany,and