If the government provides subsidies to all manufacturing and agricultural sectors, what would happen to price level and output? Price Level / Output Decrease / Indeterminate Increase / Increase Increase / Decrease Increase / Indeterminate Decrease / Increase Decrease / Decrease

Economics Jun 23, 2021

If the government provides subsidies to all manufacturing and agricultural sectors, what would happen to price level and output? Price Level / Output
Decrease / Indeterminate Increase / Increase Increase / Decrease Increase / Indeterminate
Decrease / Increase
Decrease / Decrease

Expert Solution

The correct option is 5th "Decrease / Increase". When the government provides subsidies to all manufacturing and agricultural sectors, It will increase the income of these sectors. When there income will increase, they will produce more output and price of output will decrease. It will help in consumer welfare.

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