Identify the two major criticisms of subsidies
A)Businesses should be required to manage their costs without external help or "handouts," from the government; they constitute a form of trade barrier, and they create unfair competition.
B)It maintains a favourable balance of trade; it constitutes fair competition.
C)A & B
D)None of the above

Question

Quizplus · Accepted Answer

The two major criticisms of subsidies are that they allow businesses to avoid managing their costs without external help or "handouts" from the government, which creates unfair competition, and they constitute a form of trade barrier. Option B suggests advantages of subsidies, which is not a valid criticism. Option C is incorrect because it confuses the criticisms with the benefits of subsidies. Option D is incorrect because the question specifically asks for the criticisms of subsidies.

Identify the Two Major Criticisms of Subsidies