Definitions (2)
Related Terms
1. Economic benefit (such as a tax allowance or duty rebate) or financial aid (such as a cash grant or soft loan) provided by a government to (1) support a desirable activity (such as exports), (2) keep prices of staples low, (3) maintain the income of the producers of critical or strategic products, (4) maintain employment levels, or (5) induce investment to reduce unemployment. The basic characteristic of all subsidies is to reduce the market price of an item below its cost of production. Also called subvention.
2. Indirect financial contribution by a firm to its employees, such as low cost meals or free transportation.
Also called benefit.

Use 'subsidy' in a Sentence

For decades, the federal government has provided a subsidy to corn producers in order to lower the price of corn and products containing corn for consumers.
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Michelle's organization was running a deficit, so when the new financial year began, they accepted a government subsidy in order to lower their costs.
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The recent farm subsidy had been a boon for the two potato farmers who had been forced to endure a financial loss for the drought which had caused disappointing crop yields.
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