A government payment that supports a business or market.

A government payment that supports a business or market.

• A. Tariff
• B. Standards
• C. Exchange Rate
• D. Subsidy

Answer: (D)

A government payment that supports a business or market is a subsidy. A subsidy is money or financial encouragement provided to firms or sectors to lower costs, boost production, or keep prices affordable. By reducing production costs, subsidies can shift the supply curve to the right, encouraging more output and investment in the supported area. Tariffs are taxes on imports, not payments to a business. Standards are regulatory requirements, not financial transfers. An exchange rate is the value of one currency relative to another, not a payment.

A government payment that supports a business or market is a subsidy. A subsidy is money or financial encouragement provided to firms or sectors to lower costs, boost production, or keep prices affordable. By reducing production costs, subsidies can shift the supply curve to the right, encouraging more output and investment in the supported area.

Tariffs are taxes on imports, not payments to a business. Standards are regulatory requirements, not financial transfers. An exchange rate is the value of one currency relative to another, not a payment.