Expansion in the size of government relative to the market sector will eventually retard economic growth because
a. larger governments will be more involved in activities for which they are ill-suited.
b. the higher taxes to finance a bigger government will lead to larger and larger deadweight losses from taxation.
c. the incentive to engage in innovative activities and respond to change is weaker in government than in the market sector.
d. all of the above are correct.
D
You might also like to view...
"Because chips and salsa are complements, an increase in the price of chips will cause the demand for salsa to decrease
This initial shift in demand for chips results in a higher price for chips; this higher price will cause the demand curve for chips to shift to the right." Which of the following correctly comments on this statement? A) The statement is false because one cannot assume that chips and salsa are complements for all consumers. B) The statement is false because a change in the price of chips would not change the demand for chips. C) The statement will be true if consumer tastes for chips and salsa do not change. D) The statement is false because salsa is an inferior good; chips are normal goods.
Which of the following is an example of a black market activity?
a. Purchasing banned drugs from an individual in a vacant lot b. Purchasing drugs from a pharmacy c. Purchasing automobiles from an authorized dealer d. Purchasing stocks and bonds
Large economies, such as the U.S. economy, should ________ adopt a flexible exchange rate, because giving up the power to stabilize the domestic economy via monetary policy ________.
A. almost never; is of little consequence B. nearly always; is of little consequence C. nearly always; comes with a high cost D. almost never; comes with a high cost
What is the "chicken tax" and why did it come into existence?
What will be an ideal response?