Overview
Direct subsidies are a crucial tool used by governments to support specific sectors of the economy. By providing financial assistance, they aim to lower costs for individuals and businesses, encouraging growth and stability in targeted areas. These subsidies can take various forms, including cash pa...
Key Terms
Example: The government offered a subsidy to farmers to help them grow crops.
Example: Tax credits for renewable energy installations are an indirect subsidy.
Example: Direct subsidies can lead to increased production in targeted industries.
Example: Subsidies can lead to overproduction in certain sectors.
Example: The government implemented a policy to provide subsidies for electric vehicles.
Example: Regulations may dictate how subsidies are distributed.