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Chapter 13: Q.16 (page 316)

Explain why the federal government funds national defense.

Short Answer

Expert verified

The federal government pays national defense to avoid the problem of free riders.

Step by step solution

01

Content Introduction

Individuals who want others to fund a public good and then intend to use the product themselves are known as free riders.

02

Content Explanation

Because it is nonexcludable and non-rival, national defense is a public benefit. If private enterprises are in charge, no one will be motivated to pay since they would be able to take benefit of others' services. However, there would be no national defense if everyone tried to take advantage of the system.

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