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.

Question

Quizplus · Accepted Answer

When countries subsidize their agricultural exports, the cost of production and therefore the price of the exported product decreases. This makes the product more competitive in international markets, leading to an increase in supply and a shift of the supply curve to the right.

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