Why should people without children pay some tax to support local schools?
What will be an ideal response?
Education generates an external benefit. Society as a whole, including people without children, benefits from having better educated citizens. Such a tax provides the funding for a subsidy that helps achieve the efficient amount of education.
Economics
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A key assumption of most economic analysis is that people act rationally, meaning they respond to incentives
Indicate whether the statement is true or false
Economics
The Fed's response to the zero lower bound problem was quantitative easing (or "QE"), where the Fed buys large amounts of bonds in order to:
A. Lower the interest rates B. Increase banks' reserves C. Lower bond prices D. Reduce money supply
Economics