What is the term for money or reduced taxes provided by a government to support enterprise development or public benefit?

• A. Grant
• B. Subsidy
• C. Investment
• D. Loan

Answer: (B)

The term that describes money or reduced taxes provided by a government to support enterprise development or public benefit is a subsidy. A subsidy is a financial assistance mechanism that encourages businesses to grow, increase productivity, and enhance public welfare by reducing their costs. This can take the form of direct payments or tax reductions, making it easier for enterprises to thrive and for public services to be funded.

Subsidies are particularly useful in promoting sectors deemed important for economic growth or social welfare, such as renewable energy, education, or healthcare, thereby effectively stimulating innovation and support for small businesses and startups. By receiving a subsidy, enterprises can invest more resources into operations, research and development, or expanding their services, ultimately benefiting the broader community.

The other terms typically refer to different financial concepts; grants are funds given without the expectation of repayment, investment usually involves acquiring shares or ownership in a business, and loans must be repaid with interest. Each of these plays a different role in financing and aiding business development compared to the supportive nature of subsidies.