Which term describes a financial aid that decreases a business's costs?

A subsidy is a financial aid provided by the government or other organizations to support a business or industry, reducing their costs. This assistance can take many forms, such as direct financial payments, tax breaks, or grants, allowing businesses to lower their expenses and potentially lower prices for consumers. By decreasing operating costs, subsidies can encourage production, support employment, and promote specific economic activities deemed beneficial to the public interest or local economies.

The other options refer to trade and economic restrictions rather than financial aid. For instance, a quota limits the quantity of a certain good that can be imported or exported, while an embargo is a prohibition on trade with specific countries. A tariff, on the other hand, is a tax imposed on imported goods, which raises costs rather than decreases them. Thus, a subsidy distinctly stands out as the only option that directly aids in lowering business costs.