The federal government would like to give grants to local states to promote free medical vaccinations for children. However, because of a limited budget the federal government wishes to target its spending as evidently as possible.
a. Define what would be a matching grant, and explain why it could be preferable to a block grant.
b. Now consider a closed-end matching grant that matches state spending dollar for dollar up to a specified amount, at which point the subsidy is phased out. Do you think a closed-end matching grant is preferable to an open-end matching grant?