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Subsidy

In economics, a subsidy (also known as a subvention) is a form of financial assistance paid to a business or economic sector. This can be used to support businesses that might otherwise fail or to encourage activities that would otherwise not take place.

Subsidies can be a regarded as a form of protectionism or trade barrier by making domestic goods and services artificially competitive against imports. Subsidies often distort markets, and can impose large economic costs.[1]

The term subsidy may also refer to assistance granted by others, such as individuals or non-government institutions, although this is more commonly described as charity.

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