The major difference between loan and subsidy is that
QuestionThe major difference between loan and subsidy is that
The correct answer is E.
The question is asking about the major difference between a loan and a subsidy.
A loan is an amount of money that is borrowed and is expected to be paid back with interest, while a subsidy is a financial assistance or support given by the government or an organization to reduce the cost of a product or service.
The correct answer is Option E: loan is repayable while subsidy is not. This means that a loan needs to be paid back, usually with interest, while a subsidy does not need to be repaid.
To further understand this, let's consider an example. If a farmer needs money to buy seeds and decides to take a loan from a bank, they will be given a certain amount of money that they will have to repay with interest over a period of time. On the other hand, if the government provides a subsidy to the farmer, it means that the government will reduce the cost of the seeds, making it more affordable for the farmer. The farmer does not need to pay back the subsidy amount.
It is important for farmers to understand the difference between loans and subsidies and consider the advantages and disadvantages of each option when seeking financial support for their agricultural activities.
Remember, a loan is repayable with interest, while a subsidy does not need to be repaid.
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