If a government subsidizes a high-tech firm, which, in turn, allows it to increase sales and profits from international operations by more than the cost of the subsidy:
A) it will be viewed as a strategic policy success.
B) we have to discount any success because of the environmental degradation that always occurs.
C) there will be a negative effect because the government should not and does not subsidize to gain international position for private firms.
D) there could be increased costs in the future.

Question

Quizplus · Accepted Answer

If the high-tech firm is able to increase sales and profits from international operations by more than the cost of the subsidy, it indicates that the subsidy has been successful in promoting economic growth and competitiveness. This is beneficial for the country as it strengthens the firm's position in the global market, creates jobs and generates revenue. As long as the subsidy is not harming the environment, it can be viewed as a strategic policy success.

If a Government Subsidizes a High-Tech Firm, Which, in Turn