A Level Economics (9708)•9708/12/M/J/25

Explanation
Government subsidy fully self-sustains over time
Steps:
- Identify initial subsidy amount and repayment schedule from policy details.
- Calculate annual farmer contributions that offset government outlays.
- Sum contributions over four years to match or exceed subsidy costs.
- Verify net government payment equals zero after offsets.
Why A is correct:
- Policy mandates farmer repayments equal total subsidy, resulting in $0 net cost per economic balance formula.
Why the others are wrong:
- B assumes partial repayment, ignoring full offset rule.
- C doubles unrecovered costs, overlooking annual contributions.
- D inflates to initial subsidy without subtracting repayments.
Final answer: A
Topic: Methods and effects of government intervention in markets
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