What term refers to financial assistance provided by the government to support businesses or economic sectors?

Subsidies are financial assistance provided by the government to support businesses or economic sectors, typically with the goal of promoting economic growth, stability, or specific industries that are deemed important for the public good. They can come in various forms, including cash payments, tax breaks, or lower prices for goods or services. The purpose of offering subsidies is to encourage production, reduce the cost of living for consumers, or support a sector during economic downturns.

In the context of the other terms, grants are a type of financial aid that usually do not require repayment and are often awarded for specific projects or initiatives. Loans, on the other hand, are borrowed funds that must be repaid with interest, making them different from the concept of subsidies. Investments refer to the allocation of resources, usually capital, with the expectation of generating profit, which again distinguishes them from the nature of subsidies. Thus, the term that best fits the description of government financial assistance intended to support businesses or economic sectors is subsidies.