Suppose that Eric, an economist from a business school in Georgia, and Ginny, an economist from a public television program, are arguing over saving incentives.

The following dialogue shows an excerpt from their debate:
Ginny: 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 the improvement of living standards.
Eric: I think a switch from the income tax to a consumption tax would bring growth in living standards.
Ginny: 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 _____ .
A. Difference in values
B. Difference in scientific judgements
C. Difference in perception versus reality

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

A. Employers should not be restricted from outsourcing work to foreign nations.
B. Central banks should focus more on maintaining low unemployment than on maintaining low inflation.
C. Business managers can raise profit more easily by reducing costs than by raising revenue.

Respuesta :

The correct answer in the first equation would be option C. The disagreement between these economists is most likely due to difference in perception versus reality. For the second option, the correct answer would be option B. Despite their differences, the proposition that they would agree would be that central banks should focus more on maintaining low unemployment than on maintaining low inflation. Hope this answers the question.

Correct option: Difference in scientific judgements

Both Eric and Ginny are from different backgrounds are working at the different levels of economic understanding. They have different skills sets, values and thought process for the same economic problem. Therefore, there is a difference in scientific judgement.

Correct Option A: Employers should not be restricted from outsourcing work to foreign nations.

The fundamental of economics suggest to make the best use of available resources. It suggests that if the cheap and qualified laborers are available abroad, no economy should hesitate in hiring them. It improves the profitability of the companies and make the product and services cheaper for everyone.