Suppose that Felix, an economist from an AM talk radio program, and Janet, an economist from a university in Massachusetts, are arguing over budget deficits. The following dialogue shows an excerpt from their debate:
Janet: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation. Felix: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits. Janet: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively.
1. The disagreement between these economists is most likely due to
a) difference in scientific judgements
b) difference in values
c) differences in the perception versus reality
2. Despite their differences, with which proposition are two economists chosen at random most likely to agree?
a) Immigrants receive more in government benefits than they contribute in taxes.
b) Having a single income tax rate would improve economic performance.
c) Rent ceilings reduce the quantity and quality of available housing.