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The following is an excerpt from John Locke's Two Treatises of Government (Evaluating the Evidence 15.3) : "'Tis true, governments cannot be supported without great charge, and 'tis fit every one who enjoys his share of the protection, should pay, out of this estate, his proportion for the maintenance of it. But still it must be with his own consent, i.e., the consent of the majority, giving it either by themselves, or their representatives chosen by them; for if any one shall claim a power to lay and levy taxes on the people, by his own authority, and without such consent of the people, he thereby invades the fundamental law of property, and subverts the end of government. For what property have I in that which another may be right to take when he pleases to himself."
Based on this passage, which of the following did Locke see as legitimate?
Crowding out
A situation where increased public sector spending reduces or eliminates private sector spending or borrowing due to higher interest rates.
Government Spending
The total amount of public sector expenditure on goods and services, including investments and transfers, which influences economic activity.
Interest Rates
The cost of borrowing money or the reward for saving, expressed as a percentage of the money borrowed or saved. It influences consumer spending, inflation, and overall economic activity.
Government Purchases
Expenditures by the government on goods and services that are included in the calculation of the country's GDP.
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