Which of the Following Is False with Reference to Subsidies

question 73

Multiple Choice

Which of the following is false with reference to subsidies?

• A)​They reduce the cost of production.
• B)​They transfer the income from tax payers to the exporters.
• C)​They mean the nation is exporting products in which it does not have comparative advantage.
• D)​They can lead to inefficiencies.

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Definitions:

Means-tested Programs

Governmental assistance programs where eligibility is determined based on the applicant's income and assets.

Rent-seeking

The practice of gaining economic benefits through manipulation or exploitation of the political environment, rather than through productive economic activity.

Resource Allocation

The process of assigning and managing assets in a way that supports an organization's strategic goals.

Politically

Pertaining to or dealing with the structure, organization, administration, and policies of a government or a political entity.