Question

Write the economic justification of the policy of subsidies

Answer 1

Answer:

A production subsidy encourages suppliers to increase the output of a particular product by partially offsetting the production costs or losses. The objective of production subsidies is to expand production of a particular product more so that the market would promote but without raising the final price to consumers.

Answer 2

Answer:

Subsidies are the special benefits that are given to the running business or institute in the Economy to boost their financial condition by the government to create employment and for the growth of the economic and socially.

The subsidies are said to be economic factors due to nature -

It helps to create a financial stable society.

It grows employment opportunities.

It empowers the small scale and cottage industries.