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Question 1 {25 marks} a} Is state school education a public good? Explain your answer using references to the lectures material. {1n marks} b] State

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Question 1 {25 marks} a} Is state school education a public good? Explain your answer using references to the lectures\" material. {1n marks} b] State secondary schools are nanced by public money. Assume that the government decides to increase the salaries of teachers in secondary state schools to be able to attract more qualied teachers. The increment in government spending is equal to 10 million pounds and the marginal propensity to consume {MFG} is 0.3. Assume no taxes and imports. Using a graph, sho'lIlII he'll-lI this decision will affect the equilibrium outcome of the economy. Explain clearly which 1llrariables will be affected and by how much. Discuss the intuition behind your results. {15 marks}

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