[amp_mcq option1=”payment by government for purchase of goods and services” option2=”payment made by business enterprises to factors of production” option3=”payment made by companies to shareholders” option4=”payment made by the government to business enterprises, without buying any goods and services” correct=”option4″]
The correct answer is D.
A subsidy is a form of financial assistance paid to an individual, business, or institution, usually by the government, to assist in the purchase of goods or services or to encourage the development of a particular industry. Subsidies are often used to promote economic growth, to protect domestic industries from foreign competition, or to provide social welfare benefits.
Option A is incorrect because it describes a purchase, not a subsidy.
Option B is incorrect because it describes a payment made by businesses to factors of production, not a subsidy.
Option C is incorrect because it describes a payment made by companies to shareholders, not a subsidy.