Why would the amount of education provided be inefficient if subsidies to education were not provided?
What will be an ideal response?
Private decision makers consider only private benefits and costs when purchasing education. As a result, the value that all of society places on the last unit of education purchased exceeds the cost of that education. This is not efficient because more education would generate social benefits that exceed social costs. Subsidies can overcome this problem by reducing the private cost of education, thereby leading to a greater quantity of education being provided.
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A) commercial paper market. B) repo market. C) Treasury bill market. D) Treasury bond market.
World War I (1914–18) caused inflation because
(a) war production stressed an economy already operating close to full employment. (b) fiscal policy mandated it. (c) the Federal Reserve System required it. (d) inflation always occurs in times of war.