Why does economic education confer a positive externality?

Economic education confers a positive externality primarily because it raises the education level of the entire electorate. This is significant as an informed electorate is essential for a functioning democracy, where citizens make decisions that affect public policy and governance. When individuals understand economic principles, they are more likely to engage in civic activities, advocate for sound economic policies, and make informed choices regarding taxation, spending, and regulatory issues.

Moreover, a well-informed public tends to support policies that promote economic stability and growth, which can lead to improved outcomes for society as a whole, such as higher employment rates, enhanced economic security, and reduced inequality. This collective enhancement of knowledge results in benefits that extend beyond the individual students who receive the education, positively impacting the broader community and society.

The other options focus more on individual benefits, such as personal income or reducing costs, rather than acknowledging the societal advantages that come from an educated electorate.