Governments often subsidize activities that generate positive externalities in order to get people to engage in more of them.

Question

Quizplus · Accepted Answer

Governments provide subsidies to encourage activities that produce positive externalities, such as education, research, renewable energy, and public transport. These activities generate benefits for society beyond the individual consumer, and therefore, the government tries to incentivize them by offering subsidies in different forms like grants, tax credits, or direct payments.

Governments Often Subsidize Activities That Generate Positive Externalities in Order