The Reason Why Public Subsidization of Industries in Less-Developed Countries

question 22

Multiple Choice

The reason why public subsidization of industries in less-developed countries tends to result in slow economic growth is that:

• A)when companies face no competition, there is no incentive for them to improve their production.
• B)too much of the taxpayer's money is spent in these programs.
• C)consumers tend to develop an aversion to buying subsidized goods and services.
• D)subsidies tend to create too much competition for products.
• E)subsidization creates shortage in the product market.

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