Why Have Politicians Always Favored Using Subsidies to Promote Certain

question 20

Multiple Choice

Why have politicians always favored using subsidies to promote certain economic activities?

• A) They can be treated as "benefits" that can be spread widely in response to many demands.
• B) They are generally cheaper than other forms of government support.
• C) Recipients are always required to pay back the subsidies.
• D) Congress does not have to pass legislation in order to provide subsidies.
• E) They are paid for through international tariffs rather than personal income taxes.

---

Definitions:

Cash Payment

The act of settling a debt or paying for goods or services with cash or equivalent instruments, such as checks.

Direct Method

A way of preparing the cash flow statement where actual cash flow information from operating activities is used instead of adjustments to net income.

Revenues

income that a business receives from its normal business activities, usually from the sale of goods and services to customers.

Operating Activities

Transactions and events that affect the net income of a business, related to its principal revenue-producing activities.