Future Business Leaders of America (FBLA) Marketing Practice Test

What is money provided to assist in the development and sale of products called?

1. Investment

2. A loan

3. A grant

4. A subsidy

The correct answer is: A subsidy

The correct term for money provided specifically to assist in the development and sale of products is a subsidy. A subsidy is financial support given by the government or an organization to promote a social policy or encourage activities that are thought to be beneficial for the broader economy or society. This support is often used to help lower production costs, making it easier for businesses to sell their products at competitive prices or to stimulate innovation and development in certain sectors. In contrast, investment typically refers to capital given with the expectation of generating a return, often not designated for just the development and sale of products. A loan is borrowed money that must be paid back with interest, which implies a different intention than providing straightforward support for product development. A grant is financial aid that does not have to be repaid, often associated with specific projects or research rather than broader product development and sales incentives.