A-LevelEconomicsGovernment microeconomic intervention9708/12 · May/June 2021 · Q151 Mark
The diagram shows the effect of the government introducing a subsidy on a product. [Figure 15.1] What are the effects of the subsidy on government spending and consumer spending?
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Aincreases by US240 million ; decreases by US40 million
Bincreases by US240 million ; decreases by US200 million
Cincreases by US480 million ; decreases by US40 million
Dincreases by US480 million ; decreases by US200 million
✓ Correct answer
C: increases by US480 million ; decreases by US40 million
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