Paper 2 · Government support for small firms
Which of the following is a way that a government can assist small firms?
AProviding subsidies to small firms in the form of low-cost loans and tax holidays
BIncreasing tariffs on the imported raw materials that small firms depend on
CRestricting small firms' access to government tenders and contracts
DRaising the minimum capital requirement needed to register and operate a new small business
Explanation: Government assistance to small firms includes subsidies such as low-cost loans and tax holidays, which reduce the firms' costs and improve their access to finance. Raising tariffs on inputs, restricting access to tenders, or raising registration capital requirements would all make it harder, not easier, for small firms to operate.
Derived from ZIMSEC Business_studies Paper 2, November 2019, Q1
