When a Company or Industry Is Subsidized Because It Is

question 12

Multiple Choice

When a company or industry is subsidized because it is not profitable,a secondary effect of the subsidies will likely be that

• A)jobs will be saved,so the subsidies will promote economic efficiency.
• B)resources that are used unproductively will remain in low productivity areas.
• C)the company or industry will stabilize and become profitable.
• D)the subsidies will direct resources toward highly productive projects.

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Definitions:

Inventory Items

Specific objects or products that are part of a company's inventory, available for sale or used in production.

Gross Profit

The difference between revenue and the cost of goods sold (COGS), indicating the profit made from sales before deducting operating expenses.

Beginning Inventory

The initial value of goods available for sale at the start of an accounting period.

Purchases

The acquisition of goods or services by a company in exchange for money.