Redistribution through the public sector tends to lower economic prosperity because
a. it weakens the link between productive activity and the reward derived from it.
b. it encourages resources to flow into wasteful rent-seeking activities.
c. the higher tax rates required to finance redistribution result in resources being devoted toward tax avoidance activities.
d. all of the above are true.
D
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Military expenditures in democratic nations may be _____
a. too low because politicians have long time horizons b. too low because politicians have short time horizons c. too high because politicians have long time horizons d. too high because politicians have short time horizons
Other things being equal, an increase in the labor force resulting from increased immigration tends to: a. increase wages
b. decrease wages. c. decrease the demand for labor. d. increase the demand for labor.