The Reason Why Public Subsidization of Industries in Less-Developed Countries

question 88

Multiple Choice

The reason why public subsidization of industries in less-developed countries causes slow economic growth is that:

• A) when companies face no competition, there is no incentive for them to improve their production.
• B) too much of the taxpayer's money is spent in these programs.
• C) consumers tend to develop an aversion for the purchase of subsidized goods and services.
• D) subsidies tend to create too much competition for products.
• E) subsidization creates shortage in the product market.