Redistributive Policies Are Popular Because Their Costs Are Not Noticed

question 34

True/False

Redistributive policies are popular because their costs are not noticed because they are spread among all taxpayers,but their benefits go to a specific group who knows they are benefitting.

---

Definitions:

Income Effect

The relationship between changing income in a person's life or the economy and the subsequent demand for certain goods or services.

Perfect Substitutes

Goods for which consumers are willing to replace one for the other at a constant rate, without affecting their level of utility.

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute one product for another.

Income Effect

The effect of modifications in earnings for a person or the economy on how much of a good or service is sought after.