Suppose that Shen, an economist from a research institute in Texas, and Valerie, an economist from a public television program, are arguing over budget deficits. The following dialogue shows an excerpt from their debate:
Valerie: 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.
Shen: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits.
Valerie: 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…
a. scientific judgements
b. perception vs reality
Despite their differences, with which proposition are two economists chosen at random most likely to agree?
a. Business managers can raise profit more easily by reducing costs than by raising revenue.
b. Central banks should focus more on maintaining low unemployment than on maintaining low inflation.
c. Employers should not be restricted from outsourcing work to foreign nations.
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