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Funds provided by the state to domestic producers are referred to as*1 pointsubstitutionsurplussubventionsubsidy

Question

Funds provided by the state to domestic producers are referred to as

  • substitution
  • surplus
  • subvention
  • subsidy
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Solution

The correct term for funds provided by the state to domestic producers is subsidy.

A subsidy is a form of financial assistance granted by the government to support or promote economic sectors that may struggle to compete in the market. This financial aid helps domestic producers to lower production costs, thereby allowing them to sell their goods at a more competitive price. Subsidies can take various forms, including direct cash payments, tax breaks, or low-interest loans. The goal of such financial support is often to foster economic growth, support local employment, or develop particular industries deemed crucial for the national interest. In contrast, terms like "surplus," "substitution," and "subvention" are either related to different economic concepts or are less commonly used in this specific context.

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