If the government began providing free textbooks to college students who would otherwise have bought their books from the private sector, the government's action would result in
A) an increase in real Gross Domestic Product (GDP).
B) a direct expenditure offset.
C) a Ricardian dilemma.
D) a free market equilibrium.

Question

Quizplus · Accepted Answer

Providing free textbooks to college students would result in a direct expenditure offset, as the government would be spending money on these textbooks instead of individual students. This could potentially lead to a redistribution of income and affect the private sector textbook market, but it would not directly impact real GDP or create a Ricardian dilemma.

If the Government Began Providing Free Textbooks to College Students