Consider the allocation of a nation's resources between additional public-sector spending versus additional private spending.James Buchanan argued that
A)given the current size of government,the value of the marginal dollar spent by government is less than the value of that dollar left in the hands of households or firms.
B)public sector spending is always subject to corruption and is therefore not as valuable as private spending.
C)the marginal utility of an additional dollar's worth of spending on public goods is higher than an additional dollar's worth of spending on private goods.
D)compared to public spending,private spending leads to more sustained long-run economic growth.
E)compared to private spending,public spending leads to more sustained long-run economic growth.

Question

Quizplus · Accepted Answer

James Buchanan, a Nobel laureate in economics, argued that given the current large size of government, the value of the marginal dollar spent by the government is less than the value of that dollar left in the hands of households or firms. This is because government spending tends to be less efficient and subject to political influence and bureaucracy. Therefore, channeling resources towards private spending is likely to lead to more efficient allocation of resources and higher growth in the long run.

Consider the Allocation of a Nation's Resources Between Additional Public-Sector