subsidy

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) maintainthe income of the producers of critical or strategic products, (4) maintainemployment levels, or (5) induce investment to reduce unemployment. The basiccharacteristic of all subsidies is to reduce the market price of an item below itscost of production. Also called subvention.
2. Indirect financial contribution by a firm to its employees, such as low costmeals or benefit.

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Usage Example

The government offers a subsidy to employers of students so that they are able to continue work-study programs and complete their educational degrees.

Friday Quiz Challenge
Test your knowledge of this week's terms

Question:	This is a way for a business to ensure control over their product and incoming profits, while paying less attention to customer or market demands.
Choose the Right Answer:	(A) SWOT analysis (B) monopoly (C) organizational culture (D) franchising