Why is government intervention necessary in expenditure on health and education?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Because it has a long-term impact on people
Spending on education and health builds human capital. Such spending has a substantial long-term impact and cannot be easily reversed, and private providers may charge high prices for these services. So the government steps in, both by providing schools and hospitals and by regulating private ones.