Which of the Following Statements Is NOT True Regarding Subsidies

question 28

Multiple Choice

Which of the following statements is NOT true regarding subsidies?

• A) Similar to a tax, a subsidy also creates a deadweight loss.
• B) The main beneficiary of a subsidy is the party that directly receives the check from the government.
• C) Subsidies create inefficient increases in trade.
• D) When a subsidy is present, the price received by sellers exceeds the price paid by buyers.

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Definitions:

Dominant Action

The primary or most influential action in a series of movements or decisions, often leading or setting a precedent.

Cognitive Development

The process by which a person's ability to think, reason, perceive relationships, and solve problems emerges and evolves over time.

Sensorimotor

A stage in Piaget's theory of cognitive development where infants learn to interact with their environment through sensory experiences and motor actions.

Formal Operations

The stage in Piaget's theory of cognitive development (typically beginning at age 12) where individuals can think abstractly and reason logically.