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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.
Definition of economic for Students. 1  1 : of or relating to the study of economics economic theories. 2  2 : relating to or based on the making, selling, and using of goods and services The program promoted economic growth.