#1177 Subsidies

Governments also frequently subsidize local industries to help them compete in the global market. Subsidies come [1] tax credits or direct payments. The most commonly used are farm subsidies. That allows producers to lower the price of local goods and services. This [2] the products cheaper [3] when shipped overseas. Subsidies work even better than tariffs. This method works best for countries that rely mainly on exports. [4] sometimes subsidies can have the opposite effect. The Agricultural Adjustment Act of 1933 allowed the government to pay farmers [5] to grow crops or livestock, which let their fields rest and regain nutrients. It helped the agriculture industry but raised food costs during the Depression.