Answered: Despite their differences, with which…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Agreement and disagreement among economists

Suppose that Musashi, an economist from a business administration program in Georgia, and Rina, another economist from a nonprofit institution in the Midwest, are both guests on a popular science podcast. The host of the podcast is facilitating their debate over saving incentives. The following dialogue represents a portion of the transcript of their discussion:

Rina: I think it's safe to say that, in general, the savings rate of households in today's economy is much lower than it really needs to be to sustain an improvement in living standards.

Musashi: I think a switch from the income tax to a consumption tax would bring growth in living standards.

Rina: You really think households would change their saving behavior enough in response to this to make a difference? Because I don't.

The disagreement between these economists is most likely due to DIFFERENCES BETWEEN PERCEPTION VERSUS REALITY or DIFFERENCES IN SCIENTIFIC JUDGEMENTS or DIFFERENCES IN VALUES.

Despite their differences, with which proposition are two economists chosen at random most likely to agree?

Rent ceilings reduce the quantity and quality of available housing.

Having a single income tax rate would improve economic performance.

Immigrants receive more in government benefits than they contribute in taxes.

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