Suppose two economists are debating tax reform bill. Both economists agree that the bill would increase the after-tax income of the top 5% of income earners. However, they disagree on whether the bill would improve the tax system. Which of the following is the most plausible reason for why these economists disagree? a) A lack of evidence about the long-run impact of the proposed bill. b) Differences in methodology. c) Different choices about the right simplifications to use in economic analysis. d) Differences in values.

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Business

Jadiel Hatfield

31 July, 16:17

Suppose two economists are debating tax reform bill. Both economists agree that the bill would increase the after-tax income of the top 5% of income earners. However, they disagree on whether the bill would improve the tax system. Which of the following is the most plausible reason for why these economists disagree? a) A lack of evidence about the long-run impact of the proposed bill. b) Differences in methodology. c) Different choices about the right simplifications to use in economic analysis. d) Differences in values.

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Addison Hurst · Answer 1

The correct answer is letter "C": Different choices about the right simplifications to use in economic analysis.

Explanation:

Economic Analysis refers to the study of economic situations within a region using different tools for that purpose that will let determine what the possible solutions and consequences of taking decisions of those situations could be. That is why in the case the two economists after analyzing the effects of the tax reform bill decided not to implement it.