In real terms,the cost of government spending is measured by

Question

Quizplus · Accepted Answer

The cost of government spending is measured by the private sector output sacrificed when the government employs scarce resources. This is because when the government employs scarce resources, it leads to a decrease in production by the private sector, which results in an opportunity cost. This cost is a result of the resources that could have been used by the private sector being used by the government instead. Therefore, the best option is C, which states that the cost of government spending is the private sector output sacrificed when the government employs scarce resources.

In Real Terms,the Cost of Government Spending Is Measured by