A subsidy is
A) the revenue received from the government to produce a good or service by a public authority.
B) a voucher received by the government from producers of goods and services.
C) a payment that the government makes to private producers of goods and services.
D) a tax imposed on the producers of certain goods or services.
E) a tax imposed on the consumers of certain goods or services.

Question

Quizplus · Accepted Answer

A subsidy is a payment made by the government to private producers of goods and services to encourage production of a good or service. It is meant to offset some of the costs of production and can be in the form of cash payments, tax breaks, or other forms of government support. Option A is incorrect because it describes revenue received, not payments made. Option B is incorrect because it describes a voucher, not a subsidy. Options D and E are incorrect because they describe taxes, not subsidies.

A Subsidy Is