The government of Kingsbain believes in backing its domestic firms rather than allowing foreign products to be dumped in the domestic markets. As the domestic firms of Kingsbain are inefficient, the government regularly gives them money to keep them in business. This monetary support provided by the government is called a(n) _____.

A) subsidy
B) tariff
C) embargo
D) quota

Subsidy

Financial assistance granted by the government or a public body to support businesses, reduce costs, and encourage economic activities.

Domestic Firms

Companies that operate primarily within the country of their incorporation, focusing on serving the local market.

Inefficient

Lacking in effectiveness or productivity, resulting in wasted resources or effort without achieving the desired output.