Question

Agreement and disagreement among economists

Suppose that Musashi, an economist from a business school in Georgia, and Rina, an economist from a nonprofit organization on the West Coast, are arguing over government intervention. The following dialogue shows an excerpt from their debate:

Rina: The usefulness of government intervention in the economy is a long-standing issue that economists continue to debate.

Musashi: I feel that government involvement in the economy should be reduced because government programs cause more harm than good.

Rina: While I do agree that government programs can be inefficient, I really think they are necessary to help the less fortunate.

The disagreement between these economists is most likely due to .

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

Employers should not be restricted from outsourcing work to foreign nations.

Central banks should focus more on maintaining low unemployment than on maintaining low inflation.

Business managers can raise profit more easily by reducing costs than by raising revenue.

Answer 1

In given excerpt, one economist is against the government intervention in economy as she thinks that government intervention distorts market and brings down the economic efficiency.

On the other hand, the other economist advocates government intervention as she believes that such intervention is crucial for maintenance of decent standard of living for poorer people.

So, both economists value government intervention in different manner.

Thus,

The disagreement between these economists is most likely due to differences in value.

The economists chosen at random would most likely be agree to the assertion that employers should not be restricted from outsourcing work to foriegn nations as any kind of protectionist approach with respect to trade decreases welfare by creating deadweight loss for economy as a whole.

Hence, the correct answer is the option (1).