Consider the allocation of a nation's resources between additional public-sector spending versus additional private spending.John Kenneth Galbraith argued that
A)the value of the marginal dollar spent by government is less than the value of that dollar left in the hands of households or firms.
B)public sector spending is always subject to corruption and is therefore not as valuable as private spending.
C)the marginal utility of an additional dollar's worth of spending on public goods is higher than an additional dollar's worth of spending on private goods.
D)compared to public spending,private spending leads to more sustained long-run economic growth.
E)compared to private spending,public spending leads to more sustained long-run economic growth.

Question

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John Kenneth Galbraith argued that the marginal utility of an additional dollar's worth of spending on public goods is higher than an additional dollar's worth of spending on private goods. This means that an additional dollar spent on public goods such as infrastructure, education, and healthcare, provides more value to society than an additional dollar spent on private goods such as luxury items or entertainment. This is because public goods have positive externalities and benefit society as a whole, while private goods only benefit the individual or a small group. Therefore, allocating resources towards public spending can lead to more sustained long-run economic growth.

Consider the Allocation of a Nation's Resources Between Additional Public-Sector