Overview
Government subsidies play a significant role in shaping economic landscapes by providing financial support to various industries. They can help stabilize markets, promote growth, and make essential goods and services more affordable for consumers. However, while subsidies can have positive effects, ...
Key Terms
Example: The government provided a subsidy to farmers to lower the cost of wheat production.
Example: Subsidies can lead to lower prices for consumers, distorting the natural market equilibrium.
Example: Direct subsidies to renewable energy companies help reduce their operational costs.
Example: Tax credits for electric vehicle purchases act as an indirect subsidy.
Example: When subsidies increase supply, prices may decrease due to higher availability.
Example: Subsidies can lead to economic growth by encouraging investment in key sectors.