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A subsidy is a sum of money given by the state to certain industries to lower product prices. For example, a subsidy of $6 per hat from the government can help a producer in the US compete with cheaper Chinese hats. Subsidies can benefit society by promoting new technologies or exploration but can harm by making unprofitable industries competitive, like in the case of cotton production in the US. Some of the poorest parts of the world are affected, such as Brazil.
