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Author Question: Does the benefits received principle work well for all public ... (Read 119 times)

Collmarie

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on: Jun 30, 2018
Does the benefits received principle work well for all public goods?

Question 2

Assume a U.S. firm invests 1,500 to buy a one-year U.K. bond. What is the dollar value of the proceeds if the dollar return on the U.K. bond is 20 percent at maturity?
 a. 1,800
  b. 1,500
  c. 1,200
  d. 1,000
  e. 500


Anton

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Reply #1 on: Jun 30, 2018
Answer to Question 1

The benefits received principle means that the individuals receiving the benefits are those who pay for them. Although this principle may work for some private goods, it does not work well for public goods such as national defense and the judicial system. Because we collectively consume national defense, it is not possible to find out who benefits and by exactly how much.

Answer to Question 2

a


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