What are the two conflicting incentives that politicians must deal with? What is the result of this conflict?
Please provide the best answer for the statement.
The two conflicting incentives are the popular spending programs and unpopular taxation. Government spending programs are popular among voters, especially those that receive the benefit. Politicians often experience pressure to maintain or increase spending on these programs. Taxation is very unpopular among voters, pressures exists to lower tax rates or provide various tax deductions. A budget deficit is often the result of these two conflicting incentives, government spending exceeds government revenue (taxes).
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Which of the following quotations best captures the idea of opportunity cost?
A. “Opportunity knocks but once.” B. “Every choice involves a sacrifice.” C. “Let’s not ask for the moon; we have the stars.” D. “Fools rush in where wise men fear to tread.” E. “All that glitters is not gold.”
Which of the following policies would be expected to increase private saving?
A. Increasing the tax rate on capital gains B. Replacing the income tax with a consumption tax C. Reducing the size of down payments needed to buy a house D. Providing more generous Social Security retirement benefits
If Japan gives up ten bushels of rice to produce one bicycle, while the United States gives up five bushels of rice to produce one bicycle, then:
a. the opportunity cost of producing bicycles in the United States is higher than in Japan. b. Japan has a comparative advantage in the production of bicycles. c. the United States has an absolute advantage in the production of rice. d. total output will be highest if the United States specializes in rice and Japan specializes in bicycles. e. total output will be highest if Japan specializes in rice and the United States specializes in bicycles.
The price of a typical basket of goods and services in one period divided by the price of the same basket in a different year is a(n)
a. price index b. TV-violence index c. employment index d. output index e. unemployment index