Incentives to work and save are reduced when
a. income taxes are higher.
b. consumption taxes replace income taxes.
c. corrective taxes are implemented.
d. All of the above are correct.
a
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Congressman Flack votes for a program that will benefit the constituents of Congressman Walpole. Which of the following explanations for Flack's vote is most consistent with the public choice model?
A) Congressman Flack did not have time to read and understand all of the legislation he voted on. Members of Congress often depend on their staffs to read proposed legislation and recommend how they should vote. B) Legislators such as Congressman Flack are similar to other decision-makers in that they sometimes make irrational choices. C) Congressman Flack expects Congressman Walpole's support for programs that will benefit Flack's constituents. D) Congressman Flack will support programs of legislators from his own party, regardless of who benefits from these programs.
Statistical studies in the United States have reached the conclusion that for low-income workers
A. the substitution effect is greater than the income effect. B. the income effect is greater than the substitution effect. C. the income effect is about equal to the substitution effect. D. the substitution effect is of the “wrong” sign.