8. Suppose that Yakov, an economist from an AM talk radio program, and Ana, an e

Question

8. Suppose that Yakov, an economist from an AM talk radio program, and Ana, an economist from a public television program, are arguing over saving incentives. The following dialogue shows an excerpt from their debate:

Ana: 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.

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

Ana: 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 in scientifi judgements/differences in values/differences in perceptions versus reality).

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

A). Having a single income tax rate would improve economic performance.

B). Rent ceilings reduce the quantity and quality of available housing.

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

Explanation / Answer

Here is the answer for this question:-
Answer:-
The two economist argue because the discussion is on normative statement based on value judgement. So the disagreement between these economist is most likely due to normative statement
As they are talking about household saving behavior, so they can agree with the third statement, the minimum wage laws do more to harm low skilled workers than help them. As it is related with household income.

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