Table 1 shows the annual government spending of two districts. District A has a higher unemployment rate and is considering which services should receive in...
Question 1 Report
Table 1 shows the annual government spending of two districts. District A has a higher unemployment rate and is considering which services should receive increased funding.
(a) Which district has the larger budget deficit? [1]
(b) Explain one opportunity cost of District A increasing spending on job-training courses. [1]
Answer Details
(a) District A has the larger budget deficit, equal to \(\$8\text{ million}\). [1]
(b) If District A increases spending on job-training courses, those resources cannot be used for another service, such as road repairs or health care, or for reducing taxes. [1] The best alternative use forgone is the opportunity cost.
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