To the Extent That Federal Block Grants Do Not Replace

question 18

Multiple Choice

To the extent that federal block grants do not replace state spending but increase overall spending,there is:

• A) a flypaper effect.
• B) no income effect.
• C) no substitution effect.
• D) crowding out

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Definitions:

Inverse Demand

A representation of demand in economics where the price of a good is expressed as a function of the quantity demanded.

Patent

A legal right granted to an inventor, giving them exclusive rights to manufacture, use, or sell their invention for a certain period of time.

Marginal Cost

The change in total cost that arises when the quantity produced increases by one unit.

Industry Output

The total quantity of goods or services produced by all firms within a particular industry.