The reason why public subsidization of industries in less-developed countries tends to result in slow economic growth is that:
A)when companies face no competition, there is no incentive for them to improve their production.
B)too much of the taxpayer's money is spent in these programs.
C)consumers tend to develop an aversion to buying subsidized goods and services.
D)subsidies tend to create too much competition for products.
E)subsidization creates shortage in the product market.

Question

Quizplus · Accepted Answer

Public subsidization of industries in less-developed countries tends to result in slow economic growth because when companies receive subsidies and face no competition, there is little incentive for them to improve efficiency and production quality, which in turn slows down technological progress and hinders economic growth.

The Reason Why Public Subsidization of Industries in Less-Developed Countries