ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Businesses pay the gov’t, which helps pay for gov’t services-but can lead to higher prices for their products
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Taxes
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Revenue
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Subsidies
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Cost of Production
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Explanation:
Detailed explanation-1: -Subsidies are payments, tax breaks, or other forms of economic support given by governments to certain industries or economic sectors.
Detailed explanation-2: -Whilst a tax may be imposed on generators of negative externalities, a subsidy may be granted to generators of positive externalities to ensure a higher level of consumption and production than would arise through the completely free interaction of market forces.
Detailed explanation-3: -Whereas subsidies are current payments aiming to influence levels of production or prices, grants are direct financial contributions for specific activities that support the policy objectives of the EU or the general government.
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