In the Two Decades Following 1990, Subsidized Federal Loans Per

question 8

Multiple Choice

In the two decades following 1990, subsidized federal loans per full-time student more than tripled. Economic analysis indicates that this expansion in subsidies

• A) reduced the cost of a college education for all students.
• B) increased the cost of a college education for all students.
• C) reduced the net cost of a college education for students receiving the subsidies, but increased the cost of college for other students.
• D) increased the net cost of a college education for those receiving the subsidies, but reduced the cost of college for other students.

---

Definitions:

Industrial Organization

A field of economics dealing with how firms' structures, strategies, and behaviors determine the nature and extent of competition.

Market Conditions

The current state of the economy and the supply and demand dynamics within a specific market.

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds.

Implicit Costs

The opportunity costs incurred by a firm for using its own resources without a direct monetary payment.