What is the price of an additional dollar of local spending, Ask an Expert

Economics

The state of Minnegan is considering two alternative methods of funding local road construction, matching grants and block grants. In the case of the matching grant, Minnegan will spend $1 for every $1 spent by localities.

a. What is the price of an additional dollar of local spending in each case?

b. Which of the two methods do you think would lead to higher levels of local spending on roads? describe your answer.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M969666

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