subsidy
A subsidy is money given by a government to help a business or industry keep prices low.
Explanation at your level:
A subsidy is money from the government. It helps people buy things for less money. It makes food or travel cheaper for you.
Governments give money to companies to help them. This is called a subsidy. Because the company gets money, they can sell things for a lower price to you.
A subsidy is financial support, usually from the government, given to an industry. This helps keep prices low for consumers. For example, farmers might get a subsidy to help them grow crops.
The term subsidy refers to government intervention in the market. By providing funds to producers, the government keeps essential goods affordable. It is a common topic in economic and political discussions.
In an economic context, a subsidy is a tool used to correct market failures or encourage specific behaviors. While beneficial for consumers, critics argue that subsidies can lead to inefficiency by propping up uncompetitive industries.
Etymologically derived from the Latin 'subsidium' (reserve troops), the modern subsidy is a fiscal instrument of statecraft. It represents a deliberate allocation of public funds to influence market equilibrium, often sparking intense debate regarding free-market principles versus social welfare objectives.
Word in 30 Seconds
- Financial aid from government
- Keeps prices low
- Used in economics
- Countable noun
Think of a subsidy as a helping hand from the government to keep things running smoothly. When the cost of making something—like bread, electricity, or fuel—gets too high, a government might step in to cover part of that bill.
By providing this financial support, the government ensures that essential services remain affordable for everyone. It is essentially a way to manipulate the market to benefit the public or to support a struggling industry that is vital to the country's health.
The word subsidy comes from the Latin word subsidium, which originally meant 'help' or 'relief.' In Roman times, it referred to the reserve troops stationed behind the main line of battle, ready to provide support when needed.
Over centuries, the word evolved to describe financial 'reserves' or assistance. By the 16th century, it entered English via the French word subside, specifically referring to a tax or tribute granted to a sovereign. Today, it has lost its military roots and strictly refers to economic assistance.
You will mostly hear subsidy in news reports about the economy, agriculture, or energy. It is a formal term, so you wouldn't typically use it in casual conversation with friends.
Common phrases include 'government subsidy,' 'agricultural subsidy,' and 'to receive a subsidy.' It is almost always used in the context of large-scale financial support rather than personal loans or gifts.
While there aren't many 'idioms' using this specific word, it often appears in political rhetoric. 1. 'Cut the subsidies': To stop the financial aid. 2. 'Rely on subsidies': To be dependent on government money. 3. 'Hidden subsidy': Support that isn't obvious, like tax breaks. 4. 'Cross-subsidy': Using profits from one area to support another. 5. 'Subsidy trap': When an industry becomes too dependent on government help to survive.
The word is a countable noun. Its plural form is 'subsidies.' When pronouncing it, the stress is on the first syllable: SUB-si-dee.
In British and American English, the pronunciation is quite similar, though the American 't' sound in the middle can sometimes sound like a soft 'd'. It rhymes with words like 'fiddly' or 'giddy' (loosely).
Fun Fact
It originally meant soldiers waiting in the back to help!
Pronunciation Guide
Clear 's' sounds.
The middle 's' sounds like a soft 'z' or 'uh'.
Common Errors
- Pronouncing the 'b' as 'p'
- Missing the 'i' sound
- Stressing the wrong syllable
Rhymes With
Difficulty Rating
Moderate
Formal
Formal
Moderate
What to Learn Next
Prerequisites
Learn Next
Advanced
Grammar to Know
Noun vs Verb forms
Subsidy vs Subsidize
Examples by Level
The government gives a subsidy for bread.
gov = government, gives = pays
singular noun
The farmer received a subsidy for his wheat.
The bus company gets a subsidy to keep tickets cheap.
They want to end the energy subsidy.
Is there a subsidy for solar panels?
The government subsidy helps the poor.
We need a subsidy for this project.
The subsidy makes milk cheaper.
He studied the impact of the subsidy.
The government provides a subsidy to support renewable energy.
Many industries rely on a government subsidy to survive.
The subsidy was cut due to budget problems.
Without the subsidy, the price of gas would rise.
The company applied for a housing subsidy.
Critics say the subsidy is a waste of money.
The agricultural subsidy helps small farmers.
They are planning to increase the subsidy for education.
The government is under pressure to phase out the fossil fuel subsidy.
A direct subsidy can sometimes lead to market distortion.
The airline industry received a massive subsidy during the crisis.
The policy includes a subsidy for low-income families.
We must evaluate the long-term effects of this subsidy.
The subsidy is designed to incentivize green technology.
Some argue that the subsidy creates an unfair advantage.
The trade agreement prohibits this type of export subsidy.
The government's decision to grant a subsidy sparked a heated debate in parliament.
Proponents argue that the subsidy is essential for maintaining national food security.
The WTO is investigating whether the subsidy constitutes an illegal trade barrier.
The industry has become so accustomed to the subsidy that it lacks the incentive to innovate.
A targeted subsidy can be an effective tool for social engineering.
Economists warn that the subsidy could lead to significant market inefficiencies.
The removal of the subsidy caused a sharp increase in consumer prices.
The company's profitability is entirely dependent on the government subsidy.
The pervasive nature of the agricultural subsidy has long been a point of contention in global trade negotiations.
By artificially deflating the cost of production, the subsidy obscures the true market value of the commodity.
The government's fiscal policy relies heavily on a complex web of cross-subsidies to maintain infrastructure.
Critics posit that the subsidy is merely a political tool to secure the support of powerful interest groups.
The historical evolution of the subsidy reflects the shifting priorities of the state regarding economic protectionism.
The firm's reliance on a state subsidy is indicative of its inability to compete in a deregulated environment.
The legislation aims to reform the existing subsidy framework to promote greater transparency.
The debate over the subsidy highlights the fundamental tension between market freedom and state intervention.
Common Collocations
Idioms & Expressions
"subsidy trap"
becoming dependent on aid
The industry is stuck in a subsidy trap.
formal""
""
""
""
""
Easily Confused
It is the verb form
One is the action, one is the thing
They subsidize (v) the farm with a subsidy (n).
Sentence Patterns
The government provides a subsidy for...
The government provides a subsidy for solar power.
Word Family
Nouns
Verbs
Adjectives
Related
How to Use It
7
Formality Scale
Common Mistakes
Subsidy is a noun, subsidize is the verb.
Tips
Memory Palace
Visualize a 'sub' (submarine) sitting under the water being held up by a government crane.
News Context
Look for it in business sections of newspapers.
Politics
Understand that 'subsidy' is often a debate point.
Noun vs Verb
Subsidy (noun) vs Subsidize (verb).
Stress
Always hit the first syllable hard.
Don't confuse with salary
Salary is for work; subsidy is for support.
History
It meant soldiers!
Flashcards
Use 'subsidy' on one side, 'financial support' on the other.
Formal Writing
Use it in essays about economics.
Listen for it
Listen to political debates.
Memorize It
Mnemonic
SUB (under) + SIDY (sit) = Sitting under the government's wing for support.
Visual Association
A government hand holding up a small business.
Word Web
Challenge
Find one news article about a subsidy today.
Word Origin
Latin
Original meaning: Reserve troops/help
Cultural Context
Can be a politically charged word.
Often used in political debates about taxes and farming.
Practice in Real Life
Real-World Contexts
Business News
- government subsidy
- industry support
- price reduction
Conversation Starters
"Do you think government subsidies are fair?"
"What industries should get a subsidy?"
"Are subsidies good for the economy?"
Journal Prompts
Write about a time you heard about a subsidy in the news.
Frequently Asked Questions
8 questionsIt is money for a specific purpose, not just a gift.
Usually only businesses or specific groups get them.
No, you don't pay a subsidy back.
To keep prices low or support jobs.
Subsidize.
Some people think it makes companies lazy.
Usually it is government-funded.
S-U-B-S-I-D-Y.
Test Yourself
The government gives a ___ to help.
It is the word for financial support.
What is a subsidy?
It is money given to help.
A subsidy makes things more expensive.
It makes things cheaper.
Word
Meaning
Match the concept to the definition.
Standard subject-verb-object.
Score: /5
Summary
A subsidy is government money used to help keep prices low for the public.
- Financial aid from government
- Keeps prices low
- Used in economics
- Countable noun
Memory Palace
Visualize a 'sub' (submarine) sitting under the water being held up by a government crane.
News Context
Look for it in business sections of newspapers.
Politics
Understand that 'subsidy' is often a debate point.
Noun vs Verb
Subsidy (noun) vs Subsidize (verb).
Example
The company decided to subsidize the cost of gym memberships for all employees.
Related Content
This Word in Other Languages
More Money words
prices
B1The plural of 'price', which is the amount of money expected, required, or given in payment for something. 'Prices' is used when referring to the cost of multiple goods or services, or to the general level of cost in a market or store.
barter
C1Describing a system or transaction where goods or services are exchanged directly for other goods or services without the use of money. It characterizes an economic framework reliant on the mutual needs of trading partners rather than a standardized currency.
revenue
A2Revenue is the total amount of money that a company or government receives from its activities, such as selling products or collecting taxes. It represents the money coming in before any costs or expenses are subtracted.
bullish
C1Characterized by optimism and a belief that prices or value will increase, particularly in financial markets. It also describes a person who is confident and aggressive in their pursuit of a goal or positive outcome.
richer
B1The comparative form of 'rich', indicating a greater degree of wealth, resources, or valuable possessions. It also describes something that has more of a particular quality, such as being more intense in flavor, color, or detail.
superequity
C1Describes a level of fairness, justice, or financial stake that surpasses standard or baseline equity. It is often used in legal, financial, or philosophical contexts to refer to a superior claim or an advanced standard of distributive justice.
levy
B2To officially impose or collect a tax, fee, fine, or other legal payment. It usually involves an authority, such as a government or organization, demanding a specific sum of money for a particular purpose.
microcapic
C1To scrutinize, regulate, or manage financial resources and capital expenditures at an extremely granular or minute level. It typically refers to the act of applying excessive oversight to small-scale investments or operational budgets within an organization.
subsidize
A2To support an organization or activity by providing money, usually from a government or large institution. This financial aid helps keep the price of a product or service lower for the public.
incentive
A2Describes something that encourages or motivates a person to do something. It is usually used to talk about rewards, prizes, or extra money given for good work.
