Question

Tax holidays and cash grants are examples of

• A. Tariffs
• B. Subsidies
• C. Quotas
• D. Discounts

Hint:

Subsidies, such as tax holidays and cash grants, are designed to reduce costs and encourage specific investments or economic behaviors.

Answer 1

The Correct Option is B

Tax holidays and cash grants are financial aids provided by the government to encourage investment or support specific activities. These are examples of subsidies, which are financial assistance given to businesses or individuals to reduce their costs and encourage certain behaviors or investments. 
- (A) Tariffs: Tariffs are taxes on imported goods. Tax holidays and cash grants are not taxes, so this option is incorrect.
- (B) Subsidies: Correct. Tax holidays and cash grants are forms of subsidies because they reduce the financial burden on businesses or individuals, encouraging investment or certain behaviors.
- (C) Quotas: Quotas refer to limits on the quantity of goods that can be imported or produced, which is unrelated to tax holidays or cash grants. - (D) Discounts: Discounts are price reductions on goods or services, and tax holidays or cash grants are not discounts.
The correct answer is (B), as tax holidays and cash grants are forms of subsidies provided to encourage certain economic activities.

 Final Answer: (B) Subsidies.