Question

Suppose that Brian, an economist from a business school in Georgia, and Crystal, an economist from a university in Massachusetts, are arguing over budget deficits. The following dialogue shows an excerpt from their debate:

Crystal: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation.

Brian: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits.

Crystal: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively.

The disagreement between these economists is most likely due to ( differences in values or differences in scientific judegments or differences between perception versus reality )  .

Despite their differences, with which proposition are two economists chosen at random most likely to agree?

A) Rent ceilings reduce the quantity and quality of available housing.

B) Immigrants receive more in government benefits than they contribute in taxes.

C) Having a single income tax rate would improve economic performance.

Answer 1

Answer 1: differences in scientific judgments

Explanation: Both recognize that the budget deficit must be brought down. They only disagree on the mechanisms. One thinks that reducing tax rates will help increase tax revenue and the other one thinks increasing tax rates would help achieve that. So, there is a difference in scientific judgment.

Answer 2: A) Rent ceilings reduce the quantity and quality of available housing.

Explanation: Reny ceiling imposes a higher limit of rent beyond which rent cannot go up. This reduces the quantity and quality of available housing. This is an empirically established fact and an objective statement. The other two statements are subjective.