Government granted monetary assistance to a person or a group in support of an enterprise regarded as being in public interest. This is called subsidy. Point out the statement which is also a subsidy ?
Correct answer: A. Financial assistance given by one person or government to another
- A. Financial assistance given by one person or government to another
- B. Financial assistance given to poor people
- C. Financial assistance given to aged people
- D. Financial assistance given to small companies
Explanation
A subsidy is financial assistance intended to support an activity or recipient, often to promote a public or economic objective. Option a states the general meaning, while assistance to the poor, elderly or small firms is only a subsidy when provided for such a supporting purpose.
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About Public Finance
Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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