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What may generally happen if the government increases spending on primary schools?

Answer and explanation

Correct answer: Both GDP and future welfare may rise

Government spending on primary schools purchases education services and can therefore contribute to current measured production and GDP. At the same time, schooling builds human capital by improving literacy, skills, health awareness, and future productivity. Consequently, both present output and future welfare may rise, making option A correct. The other options state effects opposite to the usual expected direction and ignore education’s productive and social benefits.

Related tags

Government SpendingPrimary EducationHuman CapitalGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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