Overview
Government subsidies play a vital role in supporting various sectors of the economy, helping to promote public welfare and correct market failures. By providing financial assistance, governments can encourage production in areas that benefit society, such as education and healthcare. However, subsid...
Key Terms
Example: The government offers subsidies to farmers to encourage food production.
Example: Pollution from a factory is a negative externality affecting nearby residents.
Example: Market failure occurs when externalities are present.
Example: National defense is a public good.
Example: Education creates a positive externality by benefiting society.
Example: Traffic congestion caused by increased car usage is a negative externality.
Related Topics
Key Concepts
SubsidiesExternalitiesMarket FailurePublic Goods