When goods are financed through the budget and can be used without any direct payment, they are known as.....

Public provision.

The correct answer is Option (2) →Public provision.

There is a difference between public provision and public production. Public provision means that they are financed through the budget and can be used without any direct payment. Public goods may be produced by the government or the private sector. When goods are produced directly by the government it is called public production.