To choose the optimal level of government expenditures,G*,the government

Question

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To choose the optimal level of government expenditures, the government must know the preferences of all consumers over private and public goods. This will enable the government to make decisions that maximize utility and welfare for society as a whole. Simply balancing the budget as in choice B may not necessarily lead to the optimal level of expenditures, as it does not take into account the relative value that consumers place on private and public goods. Similarly, minimizing the tax burden as in choice C may not lead to the optimal level of expenditures, as some public goods may be valued highly enough by consumers to justify higher taxes. Therefore, the optimal level of government expenditures is best determined by understanding the preferences of all consumers.

To Choose the Optimal Level of Government Expenditures,G*,the Government