Government subsidies are typically introduced in order to ___________________________.
A) increase a domestic firm's competitiveness
B) increase the quantity of imported goods
C) increase local prices
D) increase prices in export markets

Question

Quizplus · Accepted Answer

Government subsidies are introduced to support domestic firms by giving them financial assistance. This helps the firms to be more competitive in the global market. Subsidies help firms to reduce their production cost, increase their revenue and gain a competitive advantage. Additionally, subsidies help governments to support local industries, create jobs and improve the overall economy. Therefore, option A is the best choice as it correctly explains the purpose of government subsidies.

Government Subsidies Are Typically Introduced in Order to ___________________________