Which of the Following Statements Is NOT True Regarding Subsidies

question 28

Multiple Choice

Which of the following statements is NOT true regarding subsidies?

• A) Similar to a tax, a subsidy also creates a deadweight loss.
• B) The main beneficiary of a subsidy is the party that directly receives the check from the government.
• C) Subsidies create inefficient increases in trade.
• D) When a subsidy is present, the price received by sellers exceeds the price paid by buyers.

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Definitions:

Interdependent Tasks

Tasks in which the output, performance, or results of one task depend on the input or performance of another.

Break-even Analysis

A financial calculation that determines the point at which revenues equal costs, resulting in neither profit nor loss.

"What-if" Conditions

Hypothetical scenarios used for planning, forecasting, or decision-making that explore different outcomes based on varying parameters or assumptions.

Value Chain Management

The process of managing activities and processes to add value to products or services from production to consumption.