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In the most general terms, a subsidy can be. defined as any government assistance that (i) allows consumers to purchase goods. and services at prices lower than those offered by a perfectly competitive private.

A subsidy is money that is paid by a government or other authority in order to help an industry or business, or to pay for a public service.

Cash subsidies simply entail the government giving a sum of cash directly to a business or organization. One example of a common cash subsidy in the U.S. can be found in the renewable energy industry?cash subsidies are given to private businesses in the renewable energy sector to stimulate the growth of that industry.

A subsidy is a direct or indirect payment to individuals or firms, usually in the form of a cash payment from the government or a targeted tax cut. In economic theory, subsidies can be used to offset market failures and externalities to achieve greater economic efficiency.

It can be direct (such as cash payments) or indirect (such as tax breaks). The subsidy is typically given to remove some type of burden, and it is often considered to be in the overall interest of the public, given to promote a social good or an economic policy.

To implement subsidies, governments need to raise taxes or reallocate taxes from existing budgets. There is also an argument that incentives in the form of subsidies actually reduce the incentives of firms to cut costs.

Payments to both commercial firms and low-income individuals are examples of direct subsidies. This could include housing allowances, food vouchers for low-income families, or payments to private businesses as ?cash in the bank? payments.