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A subsidy is money from the state given to certain industries to lower product prices. For instance, if Bill produces hats for $10 while China can do it for $5, a $6 per hat subsidy from Uncle Sam makes Bill competitive. Subsidies sometimes benefit society by promoting new technologies, but can harm by propping up unprofitable industries at the expense of global competition. Brazil, for example, feels the impacts of this on the global stage.
