Which of the Following Would Be the Most Likely Result

question 39

Multiple Choice

Which of the following would be the most likely result from a new government program that provided significant financial aid for children of low- and middle-income families to attend college?

• A) Starting salaries for new college graduates would rise because of an increase in the number of high-quality graduates.
• B) Starting salaries for college graduates would be unaffected.
• C) The productivity of the labor force would be permanently lower because more young people would choose to be students instead of workers.
• D) Starting salaries of new college graduates would fall as the supply of graduates increased.

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Definitions:

Net Borrower

An entity, such as a government or a business, that borrows more money than it lends, resulting in a net outflow of funds.

Interest Rate

The part of a loan that incurs interest for the borrower, generally expressed as an annual percentage of the outstanding loan.

Net Saver

An individual or institution that saves more resources or funds than they spend or consume.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.