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Which of the following activities can be classified as provision of Subsidies?
Payment made by business enterprises to factors of production
Payment by government for purchase of goods and services
Payments made by government to business enterprises to recover a part of cost of production
Payment made by companies to shareholders to offset losses
3rd statement is correct. A subsidy is a benefit given by the government to groups or individuals, usually in the form of a cash payment or a tax reduction. The subsidy is typically given to remove some type of burden, and it is often considered to be in the overall interest of the public.
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