Question 42
Public FinanceWhich of the following is cheapest for the government in improving the welfare of its citizens?
- A.Subsidy
- B.Income supplement
- C.Donation to specific projects
- D.Wages increase.
Show the answer and explanation
Answer: B (Income supplement)
Explanation
An income supplement is paid only to those in need, so it costs less than subsidies or general wage increases that go to everyone.