The government of Kingsbain believes in backing its domestic firms rather than allowing foreign products to be dumped in the domestic markets. As the domestic firms of Kingsbain are inefficient, the government regularly gives them money to keep them in business. This monetary support provided by the government is called a(n) _____.

Question

Quizplus · Accepted Answer

A subsidy is financial assistance provided by the government to domestic firms to support them, especially when they are not competitive or efficient enough on their own. This helps the firms stay in business despite inefficiencies.

The Government of Kingsbain Believes in Backing Its Domestic Firms