Final answer:
The true statements are I) Positive externalities of education include increased productivity, and III) Free public education may or may not lead to an increase in total education spending. The correct answer is b) I & III only.
Step-by-step explanation:
You asked which of the following statements are true:
- Positive externalities of education include increased productivity.
- Parents can borrow against the child’s future labor earnings to finance private education, without the need of public interventions.
- Free public education may or may not lead to an increase in total education spending.
The correct answer to this question is b) I & III only. Positive externalities of education are well-documented benefits that extend beyond the individual to society at large. Examples include better health outcomes, lower crime rates, and a more stable democracy.
Statement I is true as one of these positive externalities specifically refers to increased productivity. Statement III is also true; providing free public education can have various effects on total education spending, but there isn't a guaranteed outcome.
It might lead to increases if more students enroll or decreases if it offsets higher-cost private education options. However, statement II is not necessarily true.
While theoretically possible, in practice, it is difficult for parents to borrow against their child’s future earnings, and public interventions are often necessary to ensure access to education for all, which undermines the absoluteness of the statement.