Government gives subsidies to encourage production of products with beneficial externalities.

Question

Quizplus · Accepted Answer

This statement is true. Governments may provide subsidies to incentivize the production of goods or services that generate positive externalities, which are benefits that spill over to society as a whole and are not captured by the producer or consumer. Examples of such goods or services include education, vaccines, and renewable energy sources. By providing subsidies, governments can help promote the production of these goods that benefit society as a whole.

Government Gives Subsidies to Encourage Production of Products with Beneficial