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1. If the government decides to subsidize the production of a good, the result would be a decrease in the equilibrium price and a decrease in the equilibrium quantity. true or false

User Milanka
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Answer: False

Step-by-step explanation:

When the government subsidies production of a good, it leads to a rise in the supply of the good. The supply curve shifts down to the right leading to a fall in the price level. But the equilibrium quantity increases.

Thus, the given statement is false that if the government decides to subsidize the production of a good, the result would be a decrease in the equilibrium price and a decrease in the equilibrium quantity.

User IronFlare
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