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Economic Definition of subsidy. Offline Version: PDF. Term subsidy Definition: A payment from government to individuals or businesses without any expectations of production. The best way of thinking about a subsidy is as a negative tax.
adj. 1. (Economics) of or relating to an economy, economics, or finance: economic development; economic theories. 2. (Commerce) Brit capable of being produced, operated, etc, for profit; profitable: the firm is barely economic. 3. (Economics) concerning or affecting material resources or welfare: economic pests.