Erma and Wayne Are Both Economists

question 117

Multiple Choice

Erma and Wayne are both economists.Erma thinks that taxing consumption,rather than income,would result in higher household saving because income that is saved would not be taxed.Wayne does not think that household saving would respond much to a change in the tax laws.In this example,Erma and Wayne

• A) have different normative views about tax policy.
• B) disagree about the validity of a positive theory.
• C) must both be incorrect because economists always agree on policy issues.
• D) None of the above is correct.

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Definitions:

Obliging

A conflict management style characterized by attempting to minimize differences and emphasizing commonalities to satisfy the concerns of the other party.

Conflict Style

A person's typical approach to handling disagreements, ranging from avoidant to collaborative strategies.

Competitiveness

The desire to win or be more successful than others.

Calm Persistence

The approach of steadily and patiently continuing with an action or stance, even in the face of obstacles or opposition, without showing agitation.