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Governmental Impact

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The local city is trying to attract a new garbage processing facility in an underdeveloped part of town. As part of the package of incentives for luring this facility's builders, the city is offering an economic subsidy of $300,000 to help build the facility.

1-define subsidy
2-identify the economic winners and losers of the $300,000 subsidy
3-explain what the city will have to give up because of the subsidy and what it will gain in the long run
4-discuss the pros and cons of the project
5-conclude by expressing a point of view
6-propose another recommendation/incentive that will help the community agree on the project

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The local city is trying to attract a new garbage processing facility in an underdeveloped part of town. As part of the package of incentives for luring this facility's builders, the city is offering an economic subsidy of $300,000 to help build the facility.

1-define subsidy
Subsidy is financial assistance that is paid to an economic enterprise. These subsidies are paid by the government to businesses so as to encourage it to carry out some economic activity. Sometimes subsidy is paid so the industry survives, sometimes the subsidy is paid so that the prices are kept low and sometimes subsidiary is paid to improve the balance of payment (increasing exports).
In this case $300,000 subsidy is being offered to bring a new garbage processing facility to an underdeveloped part of the town.
2-identify the economic winners and losers of the $300,000 subsidy
The residents of the underdeveloped part of the town are the winners as they will enjoy ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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