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The cost premium on public funds represents a deadweight loss to the economy.

01 / 10 / 2021 Research Papers

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Suppose that a $100 public project is to be financed by the sale of bonds to the public. Purchasers 1 answer below » Suppose that a $100 public project is to be financed by the sale of bonds to the public. Purchasers of the bonds increase savings by $80 and reduce private investment by $20. The only tax in the economy is a 50% business income tax. Work out the opportunity cost to the economy of raising the $100 in public funds; The cost premium on public funds represents a deadweight loss to the economy. Which group bears this cost? Explain. Aug 21 2015 03:37 PM




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