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| 1. |
Government provides subsidies to producers and transfer payments to the households. It increases government expenditure. How can this excessive expenditure be reduced ? |
| Answer» Solution :As a WELFARE PROVIDING agency, the GOVERNMENT is SUPPOSED to help the society (here producers and the households), however there should be some administrative checks enforced to evaluate the requirement of the society. Some influential producers and households MAY not require this help from the government, hence only productive expenditure should be incurred by the government. | |