3
QuizMultiple Choice

The Global Economy — Test

Question 3 • CMS 2026-2027 Economics and Personal Finance INITIAL CREDIT

Which of these is a positive incentive for domestic producers?

Answer
A
a tariff on clothes
B
a subsidy on imported cars
C
a tariff on cars
D
a subsidy on domestic oranges

Explanation

A subsidy is financial support that lowers producers’ costs or increases their returns, encouraging them to produce more. A subsidy on domestic oranges directly benefits domestic producers, so D is correct. Tariffs can protect domestic producers by making imports more expensive, but a tariff is not as direct a positive incentive as a subsidy.

AI-written and checked against the verified answer.

Previous
Next