What are payments made by a government to businesses to support them called?

Payments made by a government to businesses to support them are known as subsidies. These are financial contributions designed to help lower the cost of production for businesses, making it easier for them to operate and compete. By offering subsidies, the government can encourage specific sectors to thrive, support startups, or promote growth in industries deemed important for economic development or social policy, such as renewable energy or agriculture.

Subsidies can take several forms, including direct cash payments, tax rebates, or the provision of goods and services at reduced prices. This support helps businesses to remain solvent in challenging times or to invest in expansion when capital might otherwise be scarce. In contrast to grants, which may have fewer conditions, subsidies often require recipients to meet specific criteria or show outcomes resulting from the support. The other options such as grants, incentives, and investments do not specifically refer to government payments aimed at assisting business operations in the same direct manner as subsidies do.