When a Government Subsidy Is Granted to the Sellers of a Product

question 185

Multiple Choice

When a government subsidy is granted to the sellers of a product, buyers can end up capturing some of the benefit because

• A) the market price of the product will fall in response to the subsidy.
• B) the market price of the product will rise in response to the subsidy.
• C) the market price of the product will not change in response to the subsidy.
• D) producers will reduce the supply of the product.

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Definitions:

Ethical Business Attitudes

The demonstration of moral principles and values by businesses in their decision-making processes.

Code of Ethics

A set of principles designed to guide the professional conduct of members within an organization or profession.

Political Parties

Organizations that represent specific political ideals and aim to gain power through elections to influence public policy.

Accurate Recordkeeping

This refers to the precise and correct maintenance of business records, ensuring they accurately reflect transactions and events.