Consider the Allocation of a Nation's Resources Between Additional Public-Sector

question 15

Multiple Choice

Consider the allocation of a nation's resources between additional public-sector spending versus additional private spending.James Buchanan argued that

• A)given the current size of government,the value of the marginal dollar spent by government is less than the value of that dollar left in the hands of households or firms.
• B)public sector spending is always subject to corruption and is therefore not as valuable as private spending.
• C)the marginal utility of an additional dollar's worth of spending on public goods is higher than an additional dollar's worth of spending on private goods.
• D)compared to public spending,private spending leads to more sustained long-run economic growth.
• E)compared to private spending,public spending leads to more sustained long-run economic growth.

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Definitions:

Labor

The physical and mental effort used in the production of goods and services.

Slope

In mathematics and economics, it represents the rate at which a variable changes over the change in another variable, often depicted as a line on a graph.

Absolute Value

A mathematical term describing the magnitude of a number regardless of its sign; the distance of a number from zero on the number line.

Indeterminate

A situation or problem that cannot be resolved due to insufficient or conflicting information.