Why are public goods provided by the government, rather than by the private sector?
A) because they are large-scale projects that require the kind of financing only governments can generate through the issuance of bonds
B) because it would be difficult for a private sector firm to make a profit providing a public good, since consumers who benefit would not have to pay for it
C) because no one really benefits from public goods
D) because private sector firms do not have the foresight to plan for public goods
Answer: B
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If, while you are holding a coupon bond, its market price falls, you can be sure that
A) the coupon payment you are receiving must have been reduced. B) the interest rate on other similar bonds must have fallen. C) the interest rate on other similar bonds must have risen. D) the par value of the bond must have declined.
Which of the following is not a resource?
a. Land. b. Labor. c. Money. d. Capital.