《公共财政与公共政策——课后习题答案》英文版（Public Finance and Public Policy——Solutions Manual）

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1、SolutionsandActivitiesforCHAPTER1WHYSTUDYPUBLICFINANCE?QuestionsandProblems1.Manystateshavelanguageintheirconstitutionsthatrequiresthestatetoprovideforan“adequate”levelofeducationspending.Whatistheeconomicrationaleforsucharequirement?Therearetwoeconom

2、icrationalesforgovernmentprovisionofagoodorservice:mar-ketfailureandredistribution.Amarketfailureargumentforstateprovisionofeducationwouldbethataneducatedpopulationbenefitssocietygenerallybecause,forexample,well-educatedindividualshavebetterjobprospec

3、tsandarethereforelesslikelytocommitcrimes.Eachpersonwhoreceivesaneducationreceivesaprivatebenefit(e.g.,higherwagerate)andalsoconfersapositiveexternalityonthecommunity(e.g.,lowercrimerate).Intheabsenceofpublicprovisionofeducation,self-interestedpeoplew

4、ouldacquireless-than-optimallev-elsofeducationbecausetheywouldnottakeintoaccountitsexternalbenefit.Publiceduca-tioncancorrectthismarketfailure.Anargumentcanalsobemadethatpubliceducationisredistributivebecauseitincreasesthehumancapitalofallstudentsrega

5、rdlessoftheirindi-vidualeconomicstatus.2.Howhasthecompositionoffederalandstateandlocalgovernmentspendingchangedoverthepast40years?Whatsocialandeconomicfactorsmighthavecon-tributedtothischangeinhowgovernmentsspendtheirfunds?Since1960,therehasbeenamarke

6、dshiftoffederalspendingawayfromdefensespend-ingandtowardspendingonSocialSecurityandhealthcare.In1960,defensespendingac-countedforapproximatelyhalfofthefederalbudget,whileSocialSecurityandhealthcarecombinedaccountedforabout15%ofthebudget.In2001,SocialS

7、ecurityandhealthcarespendingeachexceededdefensespending,whichaccountedforlessthan20%oftotalfed-eralspending.Healthspendinghasalsoincreasedasafractionofstateandlocalspending,morethandoublingoverthelast40years.Otherwise,thecompositionofthestateandlocals

8、pendinghasbeenrelativelystableoverthattime.TheincreasesinexpendituresonSocialSecurityandhealthcarereflecttheagingofthepopulation.Asthebabyboomgenerationhasaged,ithashadagreaterneedforthesekindsofspending.Furthermore,thisgenerationhasplayedanin