Governments Use Subsidies

question 34

Multiple Choice

Governments use subsidies

• A)as a means of increasing government spending.
• B)when they want to increase taxes.
• C)to achieve an efficient outcome in a market with external costs.
• D)to achieve an efficient outcome in a market with external benefits.
• E)and pollution permits to achieve an efficient outcome in markets with external benefits.

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Definitions:

Sole Proprietor

An individual who owns and operates a business alone, bearing sole responsibility for its debts and liabilities.

Education Expenses

Costs associated with schooling or training, including tuition, books, and supplies, that may be eligible for tax deductions or credits.

Law School

An educational institution specializing in the study of law, preparing students to practice as attorneys.

CPA Exam

A standardized test that must be passed to become a licensed Certified Public Accountant in the United States.