If the government decides to heavily subsidize research and development, the con

Question

If the government decides to heavily subsidize research and development, the consequence would be A.  a leftward shift in the aggregate demand curve B.  an increase in unemployment C.  a decrease in labour productivity D.  a rightward shift in the long run aggregate supply curve If the government decides to heavily subsidize research and development, the consequence would be A.  a leftward shift in the aggregate demand curve B.  an increase in unemployment C.  a decrease in labour productivity D.  a rightward shift in the long run aggregate supply curve

Explanation / Answer

When government subsidizes the Research and Development activity in that case technological upgradation is there thus the efficiency increases.

Higher efficiency increases the output and reduces the overall cost of production.

Aggregate supply curve shifts rightward in the long run.

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