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 reduction of the government deficit.

Question

Quizplus · Accepted Answer

Providing free textbooks would result in a direct expenditure offset, as the government would have to spend money to produce or acquire these textbooks. This would not necessarily lead to an increase in real Gross Domestic Product (GDP), a Ricardian dilemma, or a reduction of the government deficit.

If the Government Began Providing Free Textbooks to College Students