A subsidy essentially ________ the prices of ________ rather than ________ the prices of ________.
A) lowers; foreign goods; raising; domestic
B) raises; domestic goods; lowering; foreign goods
C) lowers; domestic goods; raising; foreign goods
D) raises; foreign goods; raising; domestic goods

Question

Quizplus · Accepted Answer

A subsidy is a payment made by the government to support a particular industry or product, which usually results in lower prices for consumers. Therefore, a subsidy would lower the prices of domestic goods (whose production is being supported) rather than raising the prices of foreign goods (which are often in competition with the subsidized domestic goods). Choice C correctly reflects this.

A Subsidy Essentially ________ the Prices of ________ Rather Than

A Subsidy Essentially the Prices of Rather Than