Read the following passage carefully and answer the questions based on the passage:
People will invest in education if they are given the economic freedom to fully enjoy the benefits. As has become the norm, people invest in education because the marginal return on education increases their economic freedom. It is a sound decision to invest in education if, after tax rate reductions, people can enjoy a certain income marginally higher than the income they derive from improving educational levels. However, it makes no significant sense to invest in education if the government taxes the income of educated people at a very high rate. The same applies to parents who wish to improve their children's educational standards.
When does it make economic sense for individuals to invest in education?
Show answer & explanation
Correct answer: B
Explanation
The passage states that "It is a sound decision to invest in education if, after tax rate reductions, people can enjoy a certain income marginally higher than the income they derive from improving educational levels." Conversely, it makes no sense to invest if the government taxes the income of educated people at a very high rate. Therefore, the economic sense of investing in education is directly tied to the ability to enjoy the financial benefits of that education through lower taxes.