Does a Subsidy to Buyers Affect the Demand Curve

question 90

Multiple Choice

Does a subsidy to buyers affect the demand curve?

• A) Yes, it shifts demand up by the amount of the subsidy.
• B) Yes, it shifts demand to the right by the amount of the subsidy.
• C) No, the quantity demanded will increase, but the demand curve does not move.
• D) No, the quantity demanded will decrease, but the demand curve does not move.

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Definitions:

Less Developed Country

A country with a lower level of industrialization, usually accompanied by lower living standards and lower HDI (Human Development Index) scores.

Expropriation

The act of a government taking privately owned property, either with compensation or without compensation, for public use.

Nonconvertible Currency

A currency that cannot be freely converted into other currencies on the foreign exchange market due to foreign exchange regulations.

Globalization

The process of interaction and integration among people, companies, and governments worldwide, often characterized by global trade and cultural exchange.