Subsidy
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Subsidy
– Definition
– Government expenditure
– Aim: stabilize the economy
– Ensures viability of individuals, households, and businesses
– Access to essential goods and services
– Support for businesses
– Types
– Cash subsidies
– Price subsidies
– Production subsidies
– Employment subsidies
– Export subsidies
– Impact
– Encourages consumption
– Boosts production
– Fosters innovation
– Reduces income inequality
– Stimulates economic growth
– Criticisms
– Market distortion
– Inefficient allocation of resources
– Encourages dependency
– Costly for governments
– May benefit the wealthy more
– Examples
– Agricultural subsidies
– Housing subsidies
– Energy subsidies
– Healthcare subsidies
– Education subsidies