Which of the Following Is True of an Excise Subsidy

Multiple Choice

Which of the following is true of an excise subsidy?

A) An excise subsidy has a positive substitution effect but negative income effect on the consumption of the subsidized good.
B) An excise subsidy increases consumption of the subsidized good more than a cash transfer of equal-cost.
C) An excise subsidy leaves the well-being of the subsidy recipient unchanged.
D) An excise subsidy causes consumption of nonsubsidized goods to increase.