What is price support ?
Correct answer: B. Maintenance of price through public subsidy or government intervention
- A. To increase price artificially
- B. Maintenance of price through public subsidy or government intervention
- C. To enhance price
- D. To maintain price at specific level
Explanation
Price support is government action, often through subsidies or purchases, designed to keep a commodity’s price at or above a chosen level. Option b gives the complete economic meaning, whereas the other choices are incomplete.
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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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