Most governments subsidize basic education because
A) there are external costs associated with well educated citizens.
B) the marginal social benefit of education is greater than the marginal private benefit.
C) of the existence of private schools.
D) None of the above answers are correct.
B
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How is the equilibrium exchange rate determined?
What will be an ideal response?
The U.S. economy in 2009 was characterized by an excess level of output. This corresponds to a recessionary gap.
Answer the following statement true (T) or false (F)
An across-the-board income tax cut where all income taxes were cut by a constant percentage would
A. necessarily go to higher-income people and alter the after-tax distribution of income in favor of high-income people. B. necessarily go to higher-income people. C. alter the after-tax distribution of income in favor of high-income people. D. by definition, keep the after-tax distribution of income relationships constant.
The target rate of inflation for the European Central Bank (ECB) is:
(a) Above 2%. (b) Below, but close to, 2%. (c) 0%. (d) None of the above, because the ECB targets a rate of deflation.