Government payments to suppliers are called subsidies

true or false

The correct answer is false.

It is false that government payments to suppliers are called subsidies. Government payments to suppliers are called excise taxes.

When a purchase is made on a specific good, it includes excise taxes. It is a flat-rate tax in specific services, goods, or activities. The best example is gasoline. It is already included in the price you pay. Alcohol can be another example of a product with an excise tax.

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