Question

Which of the following best describes a subsidy​? A. Banks make​ low-interest loans to farmers. B. The government puts a tax of​ $100 per ton on wheat imports. C. The government pays farmers​ $100 per ton of wheat produced. D. Farmers pay the government​ $100 per ton of wheat produced.

Answer 1

Answer:

C. The government pays farmers​ $100 per ton of wheat produced.

Explanation:

Subsidy is grant/ financial aid given by government to producers of a commodity, to enable its availability in markets at a lower price.

Government paying farmers $100 tone per wheat produced is a subsidy as : It is a financial assistance given by government to reduce wheat's price in markets.

Bank's low interest rate to farmers is just credit ease policy ; Govt putting a tax on wheat imports is opposite of subsidy ; Farmer paying govt $100 per unit wheat is also a form of tax (opposite to subsidy).