When a Subsidy Program Allocates Subsidies to a Subset of the Population

question 31

Multiple Choice

When a subsidy program allocates subsidies to a subset of the population, the result is greater demand and higher prices in the market where purchases are subsidized, raising costs for

• A) only those buyers receiving the subsidies.
• B) primarily those buyers receiving the subsidies.
• C) all buyers in that market.
• D) only the taxpayers who pay for the subsidy.

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Definitions:

Leasehold Estate

The leased property.

Premises

Land and the buildings on it, referred to especially in the context of business or law.

Rental Area

The specific portion of a property that is available for lease or rent to tenants.

Rent Ceilings

Government-imposed limits on the maximum amount that can be charged for renting a property, aimed at protecting tenants from excessive rent increases.