Wednesday, 15 April 2009

Subsidy

Government’s payment to a business to successfully run or compete with foreign companies is
called subsidy,
Subsidies are usually provided for many reasons,
When the price of commodity has to be kept low like subsidy to farmers to produce food but
prices of food has to be kept low so poor people can survive.
When a business as a whole starts to fail due to economic circumstances, like in case of airlines
immedg after 9/11 or at the time of oil shock of mid 2008.
When a business is providing large scale employments but running into losses

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