subsidies
Definition
Subsidies are financial assistance provided by governments to businesses, industries, or individuals to support economic activities deemed beneficial for the country. They can take various forms such as grants, tax breaks, or direct payments.
Analogy
Imagine if your parents provided you with a monthly allowance to help cover your college expenses because they believe education is important and want to ensure you succeed without financial stress. Similarly, governments give subsidies to support sectors or activities they consider vital for national interests or economic stability.
Related terms
Trade Barriers: Measures imposed by a government to restrict or regulate trade between countries, often through tariffs or quotas.
Fiscal Policy: Government policies related to taxation and spending that influence the economy.
Protectionism: An economic policy of restricting imports from other countries through methods such as tariffs and quotas to protect domestic industries
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