Question

In an​ economy, if the government implements a law for individuals that requires them to save at least​ 25% of their annual income in a social savings plan framed by the government. For supporting this​ plan, the government raises revenues by implementing income tax rates that are higher compared to the other countries. Which of the following will be a​ result(s) of this​ scenario? ​(Check all that apply.​) A. It strengthens the view of consumer sovereignty. B. An increase in immigration of​ high-income innovators. C. An increase in the deadweight losses. D. An increase in costs to the government. Which of the following arguments is not consistent with​ paternalism? A. Individuals make choices that reflect their true preferences and know what is best for them. B. The government should encourage or induce individuals to change their actions. C. Individuals may suffer from decision errors. D. Individuals may find it difficult to evaluate certain choices. Which of the following functions is beyond the scope of economics as far as government intervention is​ considered? A. To weigh the costs and benefits of specific interventions. B. To help in improving the design of policies. C. To make a value judgment on whether government is good or bad. D. To understand what sorts of activities require intervention.

Answer 1

Answer 1:

Option C. An increase in the income tax rate will lead to increase in deadweight losses in the economy. Taxes lead to deadweight losses and increase in taxes will lead to increase in deadweight loss in the society.

Option A. It will also increase consumer sovereignty because taxes are being raised for carrying out social security measures.

Answer 2;

Option D. The statement which is not consistent with paternalism is  Individuals may find it difficult to evaluate certain choices. Individuals can make choices easily by comparing the bundles.

Answer 3:

option C.o make a value judgment on whether government is good or bad.A person from outside the government is needed to make this value judgement.