1. In an economy, if the government implements a law for individuals that requires them to save...
Question:
1. In an economy, if the government implements a law for individuals that requires them to save at least 25% of their annual income in a social savings plan framed by the government. For supporting this plan, the government raises revenues by implementing income tax rates that are higher compared to the other countries. Which of the following will be a result(s) of this scenario?
A. It strengthens the view of consumer sovereignty.
B. An increase in immigration of high-income innovators.
C. An increase in the dead-weight losses.
D. An increase in costs to the government.
2. Which of the following arguments is not consistent with paternalism?
A. Individuals make choices that reflect their true preferences and know what is best for them.
B. The government should encourage or induce individuals to change their actions.
C. Individuals may suffer from decision errors.
D. Individuals may find it difficult to evaluate certain choices.
3. Which of the following functions is beyond the scope of economics as far as government intervention is considered?
A. To weigh the costs and benefits of specific interventions.
B. To help in improving the design of policies.
C. To make a value judgment on whether government is good or bad.
D. To understand what sorts of activities require intervention.
Principles of Macroeconomics
ISBN: 978-0134078809
12th edition
Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster