import subsides

• What are subsidies normally given as?

  Indirect subsidies
• Why are indirect subsidies preferred over direct subsidies?

  They help domestically produced goods compete against imports
• What forms can indirect subsidies take?

  Cheap loans or tax breaks on investment
• How do cheap loans help firms compete against imports?

  They reduce the cost of borrowing for investment
• What is the purpose of tax breaks on investment for firms?

  To allow firms to compete more effectively against imports
• What are the main characteristics of indirect subsidies?

  • Given as indirect rather than direct
  • Help domestically produced goods compete against imports
  • Take the form of cheap loans or tax breaks