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.

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Definitions:

Income from Operations

Financial performance metric that shows earnings from normal business activities, excluding effects of interest and taxes.

Transfer Price

The price at which goods and services are sold between subdivisions, affiliates, or subsidiaries within the same organization.

Variable Cost

Variable costs are expenses that vary directly with the level of production or business activity, such as raw materials and direct labor.

Income Increase

Income increase refers to the rise in earnings over a period, which could be due to various factors such as revenue growth, cost reduction, or operational efficiency improvements.