Economics · Public Finance and Fiscal Policy
In the context of government welfare policy, consider the following statements: Assertion (A): When the government feels that market mechanisms do not lead to adequate consumption of merit goods and essential services, it provides subsidies and free services. Reason (R): Subsidies are provided primarily to ensure profit maximization for state agencies.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1(A) is false, but (R) is true
- 2(A) is true, but (R) is false✓
- 3Both (A) and (R) are true, but (R) is not the correct explanation of (A)
- 4Both (A) and (R) are true and (R) is the correct explanation of (A)
Correct answer
(A) is true, but (R) is false
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