Consider a Public Good Such as Fire Protection Services

question 148

Multiple Choice

Consider a public good such as fire protection services.Rich people may benefit more than the poor from such a service because rich people stand to lose more from a fire that destroys property.In this case

• A)the ability-to-pay principle may support the rich paying more taxes than the poor, but not the benefits-received principle.
• B)the benefits-received principle may support the rich paying more taxes than the poor, but not the ability-to-pay principle.
• C)both the benefits-received and the ability-to-pay principles may support the rich paying more taxes than the poor.
• D)neither the benefits-received nor the ability-to-pay principles may support the rich paying more taxes than the poor.

---

Definitions:

Loanable Funds

Money available for borrowing, which consists of savings that banks and other financial institutions can lend to businesses and individuals.

Policy Change

A policy change refers to alterations made to existing laws, regulations, or guidelines by governments, institutions, or organizations, aiming to address specific issues or improve outcomes.

Loanable Funds

The funds available in the financial markets for borrowing, influenced by interest rates, savings, and investments.

Exchange Rate

The price of one currency expressed in terms of another.