Elucidate reallocation of Government resources

Question

Elucidate reallocation of Government resources?

Answer 1

1. Government can increase demand by providing subsidies like food stamps and education grants to subsidize consumers.

2. Government can finance production of good or service such as public education or public health.

3. Government can increase supply by subsidizing production, such as, immunization programs, higher education as well as public hospitals.

4. Government provides public goods and quasi-public goods and services.