Question

Subsidy is —

• A. Concession
• B. Discount
• C. Repayment
• D. None of these

Hint:

A subsidy is financial aid or concession, not a commercial discount. Governments use subsidies to support industries, farmers, and public welfare schemes.

Answer 1

The Correct Option is A

Step 1: Understanding the term “Subsidy.”
A subsidy is a form of financial assistance granted by the government or an institution to individuals or businesses.
It is intended to promote certain economic activities or to make essential goods and services affordable.
Subsidies may take various forms such as direct cash payments, tax reductions, or price support mechanisms.
Step 2: Meaning of “Concession.”
A concession refers to a reduction in the price, tax, or cost of something as a form of financial relief.
In economics, it aligns closely with the idea of subsidy — both represent financial assistance or relaxation in costs.
Step 3: Analysis of options.
- (1) Concession: Correct — a subsidy acts as a financial concession provided by the government.
- (2) Discount: Incorrect — a discount is a price reduction given by a seller to promote sales, not a government grant.
- (3) Repayment: Incorrect — repayment involves returning borrowed money; it’s the opposite of a subsidy.
- (4) None of these: Incorrect — as “concession” accurately represents a subsidy.
Step 4: Conclusion.
Therefore, a subsidy is best described as a concession.