When the government funds a project that will create jobs, the funds for the project
A) are essentially free, because the project originated in the government sector.
B) will leave private sector output and employment unchanged.
C) will generate additional tax revenues that will pay for the project.
D) will have to be either taxed or borrowed from the private sector.

Question

Quizplus · Accepted Answer

When the government funds a project that will create jobs, the funds for the project will have to come from somewhere, either through taxes or borrowing from the private sector. This means that there is an opportunity cost in terms of the foregone private sector investment or consumption.

When the Government Funds a Project That Will Create Jobs