What is a government payment that supports a business or market called?

The term that describes a government payment designed to support a business or market is known as a subsidy. Subsidies are provided to encourage certain economic activities, reduce the cost of production, and promote investment in particular sectors. They can take various forms, including direct cash payment, tax breaks, or price supports, aimed at increasing the supply of a good or service that the government deems important for the economy or social welfare.

By lowering production costs or enhancing revenue, subsidies enable businesses to operate more competitively in the market, which can lead to lower prices for consumers or support struggling industries. This government intervention is typically aimed at stabilizing markets or fostering growth in key sectors, making it a crucial tool in economic policy.

In contrast, while grants are funds provided without the expectation of repayment, they are often designed for specific projects or purposes, rather than directly supporting a market as a whole. Loans involve borrowing money that must be repaid, often with interest, which is fundamentally different from the financial support that subsidies provide. Investments refer to the allocation of resources to generate returns and do not necessarily imply direct government support for particular businesses or markets in the way subsidies do.