Question: In each of the following circumstances, decide whether the impact of government on the economy increases or decreases and why. In each case how does your answer compare to that given by standard measures of the size of government?
a. Normally, when employers offer health insurance benefits to their workers, these benefits extend to the spouses of the workers as well. Several years ago, San Francisco passed a law requiring firms that do business with the city to offer health and other benefits to both same- and opposite-sex unwed partners.
b. The federal government requires that auto nvakers increase the average number of miles per gallon of the passenger vehicles they produce.
c. The ratio of government purchases of goods and services to Gross Domestic Product falls.
d. The federal budget is brought into balance by reducing grants-in-aid to state and local governments.