If the government began providing free textbooks to college students who were already buying textbooks from the private sector,the government's action would result in

Question

Quizplus · Accepted Answer

The government's action of providing free textbooks would lead to an increase in demand for textbooks, which would result in a reduction of supply from the private sector. This would lead to crowding out of the private sector, reducing their profits and possibly leading to some companies going out of business. While this may benefit some students, it may have negative effects on the economy as a whole. Therefore, option B is the best choice. Option A is incorrect because the provision of free textbooks may not necessarily lead to an increase in real GDP. Option C is unrelated to the scenario and is therefore incorrect. Option D is also incorrect because providing free textbooks would require government expenditure and would not necessarily lead to a reduction in the government deficit.

If the Government Began Providing Free Textbooks to College Students