SSC
INDIAN ECONOMY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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payment by government for purchase of goods and services
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payment made by the government to business enterprises, without buying any goods and services
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payment made by companies to shareholders
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payment made by business enterprises to factors of production
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Detailed explanation-1: -Subsidies mean:a)payment by government for purchase of goods and servicesb)payment made by business enterprises to factors of productionc)payment made by companies to shareholders d)payment made by the government to business enterprises, without buying any goods and servicesCorrect answer is option ‘D’.
Detailed explanation-2: -Definition: Subsidy is a transfer of money from the government to an entity. It leads to a fall in the price of the subsidised product. Description: The objective of subsidy is to bolster the welfare of the society.
Detailed explanation-3: -Key Takeaways. A subsidy is a direct or indirect payment to individuals or firms, usually in the form of a cash payment from the government or a targeted tax cut. In economic theory, subsidies can be used to offset market failures and externalities to achieve greater economic efficiency.
Detailed explanation-4: -A subsidy is an economic benefit or financial aid given by the government to individuals, institutes or organisations in the form of a cash payment or a tax reduction.