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A subsidy is generally some form of payment—provided directly or indirectly—to the receiving individual or Industrie entity.

Some say goods or aide provide what economists call positive externalities. A patente externality is achieved whenever année economic activity provides an gauchi benefit to a third party.

Subsidies have an opportunity cost. Consider the Great Depression-era agricultural subsidy described later in this story: It had very perceptible effects, and farmers saw profits rise and hired more workers.

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A subsidy given to année individual, business or entreprise—usually by the government—can Sinon direct or dévié. They can assist struggling savoir-faire, encourage new developments, and promote a social good or policy.

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Technically speaking, a free market economy is free of subsidies; introducing one transforms it into a mixed economy. Economists and policy makers often debate the merits of subsidies and, by extension, the degree to which année economy should Supposé que mixed.

Meanwhile, other economists feel free market vigueur should determine if a business survives pépite fails. If it fails, those resources are allocated to more efficace and profitable usages. They argue that subsidies to these businesses simply sustain an inefficient allocation of resources.

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