SSC
INDIAN ECONOMY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Subsidies do not allow prices to indicate the supply of a good. True/False?
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True
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False
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -They can assist struggling industries, encourage new developments, and promote a social good or policy. Sometimes by helping one sector or group in the economy, they hurt another group, such a subsidy that helps farmers but increases food prices for consumers.
Detailed explanation-2: -Disadvantages of Subsidies This is because lowered prices can lead to a sudden rise in demand that many producers may find very hard to meet. Ultimately, it can lead to very high demand that causes an increase in prices.
Detailed explanation-3: -Subsidy is a payment that a. government makes to a producer to supplement the market price of a commodity.
There is 1 question to complete.