Question
Question Government subsidies are an effort to assist domestic businesses from the threat of foreign imports True False 1 pts
Answer
4
(256 Votes)
Leon
Professional · Tutor for 6 years
Answer
True
Explanation
The question pertains to government subsidies. Subsidies represent forms of support that governments provide to domestic businesses and industries. They usually involve payments or tax breaks and aim towards bolstering those entities who cannot compete without an economic push or maintaining sectors considered vital to national economy. In this context, subsidies can be ways to help domestic firms handle competition from abroad. The prowess of foreign industries, often because of factors like cost advantage or technological advancement, can threaten domestic enterprises. Therefore, subsidies function as a measure to protect the local industry from the effect of stronger foreign competition. This supports the company to produce at reduced costs, sell cheaper, outperform foreign competition, and take advantage of increased demand.