If a community makes different spending decisions when offered a block grant or, alternatively, a categorical grant of equal size, we know that (a) The community reaches a higher level of social welfare under the block grant. (b) The categorical grant elicits more spending in the designated category than the block grant does. (c) The categorical grant elicits a level of community expenditures in the designated category equal to the size of the grant. (d) All of the above.
If a community makes different spending decisions when offered a block grant or, alternatively, a categorical grant of equal size, we know that (a) The community reaches a higher level of social welfare under the block grant. (b) The categorical grant elicits more spending in the designated category than the block grant does. (c) The categorical grant elicits a level of community expenditures in the designated category equal to the size of the grant. (d) All of the above.
Chapter15: Medical Care Reform In The United States
Section: Chapter Questions
Problem 3QAP
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Question
![2. If a community makes different spending decisions when offered a block grant or, alternatively,
a categorical grant of equal size, we know that
(a) The community reaches a higher level of social welfare under the block grant.
(b) The categorical grant elicits more spending in the designated category than the block grant
does.
(c) The categorical grant elicits a level of community expenditures in the designated category
equal to the size of the grant.
(d) All of the above.
Choose the relevant option and provide a detailed justification and a graphical illustration.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F82b20c2f-dd6d-4aa1-962c-8977ac965c84%2F58b12d97-aa47-4064-bc8c-8ac404270916%2Fruib4sg_processed.png&w=3840&q=75)
Transcribed Image Text:2. If a community makes different spending decisions when offered a block grant or, alternatively,
a categorical grant of equal size, we know that
(a) The community reaches a higher level of social welfare under the block grant.
(b) The categorical grant elicits more spending in the designated category than the block grant
does.
(c) The categorical grant elicits a level of community expenditures in the designated category
equal to the size of the grant.
(d) All of the above.
Choose the relevant option and provide a detailed justification and a graphical illustration.
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