subsidies

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subsidies are transfer payments, usually made by government to individuals, groups, or institutions, to bring about a redistribution of welfare which could not be achieved through market forces. If a particular export industry is unable to maintain production and employment because international prices are too low, a subsidy on exports from the government might increase the firms' revenues sufficiently to keep them in operation. Governments have used subsidy payments to fulfil social objectives by subsidizing the cost of public sector housing through grant payments to local authorities which, in turn, have often subsidized the rents charged to benefit tenants on low incomes. The term ‘subsidy’ was also used, until the 18th cent., to describe grants of taxation.

Clive H. Lee

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