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The relationship between subsidy and incentive can appropriately be brought out by which one of the following propositions?
  • a)
    Incentives are concessions, bounties offered to borrow money to set up a production activity, while subsidy is a non-cash concession given to translate idea into productive action
  • b)
    Incentives and subsidies are cash disbursement only to the intrapreneur
  • c)
    Incentives and subsidies are non-cash motivating factors to promote a new enterprise.
  • d)
    Incentives are financial as well as non-financial stimuli encouraging to undertake productive activities, while subsidy pertains to a single lump sum payment given by the government to an entrepreneur for compensating him for the excess cost over administered price of a product or service.
Correct answer is option 'D'. Can you explain this answer?
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The relationship between subsidy and incentive can appropriately be b...

Explanation:

Differentiation between Incentives and Subsidies:

- Incentives: Incentives are stimuli that encourage individuals or entities to undertake productive activities. These incentives can be both financial and non-financial in nature. They are provided to motivate and reward specific actions that contribute to economic growth and development.

- Subsidies: Subsidies, on the other hand, are financial assistance provided by the government to support certain industries, products, or services. Subsidies are typically given as a lump sum payment to entrepreneurs to compensate for the excess cost of production over the administered price of a product or service.

- Relationship: Incentives and subsidies are both tools used to promote economic activities, but they serve different purposes. While incentives aim to encourage and reward specific actions, subsidies are designed to provide financial support to overcome cost differentials.

- Example: For instance, a government may offer tax incentives to companies that invest in research and development activities to stimulate innovation. On the other hand, a subsidy may be provided to a farmer to offset the higher costs of organic farming practices.

- Conclusion: In summary, incentives and subsidies play distinct roles in promoting economic growth and development. Incentives serve as motivators for specific actions, while subsidies offer financial support to address cost differentials. Both are essential tools in the government's economic policy toolkit.
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The relationship between subsidy and incentive can appropriately be b...
The relationship between subsidy and incentive can appropriately be brought out by incentives and subsidies. Incentives are financial as well as non-financial stimuli encouraging to undertake productive activities. An incentive is an object, item of value, or desired action or event that spurs an employee to do more of whatever was encouraged by the employer through the chosen incentive.
Subsidy pertains to a single lump sum payment given by the government to an entrepreneur for compensating him for the excess cost over administered price of a product or service. Subsidies come in various forms including direct (cash grants, interest-free loans) and indirect (tax breaks, insurance, low-interest loans, accelerated depreciation, rent rebates).
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The relationship between subsidy and incentive can appropriately be brought out by which one of the following propositions?a)Incentives are concessions, bounties offered to borrow money to set up a production activity, while subsidy is a non-cash concession given to translate idea into productive actionb)Incentives and subsidies are cash disbursement only to the intrapreneurc)Incentives and subsidies are non-cash motivating factors to promote a new enterprise.d)Incentives are financial as well as non-financial stimuli encouraging to undertake productive activities, while subsidy pertains to a single lump sum payment given by the government to an entrepreneur for compensating him for the excess cost over administered price of a product or service.Correct answer is option 'D'. Can you explain this answer?
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The relationship between subsidy and incentive can appropriately be brought out by which one of the following propositions?a)Incentives are concessions, bounties offered to borrow money to set up a production activity, while subsidy is a non-cash concession given to translate idea into productive actionb)Incentives and subsidies are cash disbursement only to the intrapreneurc)Incentives and subsidies are non-cash motivating factors to promote a new enterprise.d)Incentives are financial as well as non-financial stimuli encouraging to undertake productive activities, while subsidy pertains to a single lump sum payment given by the government to an entrepreneur for compensating him for the excess cost over administered price of a product or service.Correct answer is option 'D'. Can you explain this answer? for CAT 2024 is part of CAT preparation. The Question and answers have been prepared according to the CAT exam syllabus. Information about The relationship between subsidy and incentive can appropriately be brought out by which one of the following propositions?a)Incentives are concessions, bounties offered to borrow money to set up a production activity, while subsidy is a non-cash concession given to translate idea into productive actionb)Incentives and subsidies are cash disbursement only to the intrapreneurc)Incentives and subsidies are non-cash motivating factors to promote a new enterprise.d)Incentives are financial as well as non-financial stimuli encouraging to undertake productive activities, while subsidy pertains to a single lump sum payment given by the government to an entrepreneur for compensating him for the excess cost over administered price of a product or service.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The relationship between subsidy and incentive can appropriately be brought out by which one of the following propositions?a)Incentives are concessions, bounties offered to borrow money to set up a production activity, while subsidy is a non-cash concession given to translate idea into productive actionb)Incentives and subsidies are cash disbursement only to the intrapreneurc)Incentives and subsidies are non-cash motivating factors to promote a new enterprise.d)Incentives are financial as well as non-financial stimuli encouraging to undertake productive activities, while subsidy pertains to a single lump sum payment given by the government to an entrepreneur for compensating him for the excess cost over administered price of a product or service.Correct answer is option 'D'. Can you explain this answer?.
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