Subsidies: Governments Choosing Favorites- Economic Theory Series| Academy 4 Social Change

Subsidies are benefits given to either institutions, businesses, or individuals by the government. Subsidies can be given directly or indirectly to their intended recipients. They can come in the form of either cash payments or tax cuts, or even a guarantee that the government will buy a product. Economically speaking, subsidies are designed to relieve some sort of burden from the recipients, usually to promote a social good or stimulate economic activity.

**Think Further Questions
1. Why would a government want to enact subsidies for a specific industry?
2. Can you think of a modern-day program that would be considered a subsidy?
3. What sort of externalities could a subsidy create? Consider both positive and negative ones.

**Contents
00:00 - Introduction
00:29 - Explanation
00:48 - Definition of Subsidies
01:12 - How It Works
03:17 - Why Care?

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