Question

Suppose that Sean, an economist from a research institute in Texas, and Yvette, an economist from a university in Massachusetts, are arguing over saving incentives. The following dialogue shows an excerpt from their debate: Yvette: I think it's safe to say that, in general, the savings rate of households in today's economy is much lower than it really needs to be to sustain an improvement in living standards. Sean: I think a switch from the income tax to a consumption tax would bring growth in living standards. Yvette: You really think households would change their saving behavior enough in response to this to make a difference? Because I don't. The disagreement between these economists is most likely due to differences in scientific judgments Despite their differences, with which proposition are two economists chosen at random most likely to agree? O Having a single income tax rate would improve economic performance. O Rent ceilings reduce the quantity and quality of available housing. Immigrants receive more in government benefits than they contribute in taxes.

Answer 1

1. Differences in scientific judgement

Reason- The judgement by Yvette and Sean is based on their scientific analysis about the saving incentive. Different economist often have different or contrasting viewpoints.

2. Rent ceiling reduce the quantity and quality of available housing.

Reason- Rent ceiling when set below the equilibrium rent is effective and leads to inefficient market conditions. According to a poll published in 1992, 93% economist out of total 464 economists agreed that 'Rent ceiling reduce the quantity and quality of available housing.'.