Hayek's Response to Galbraith's Argument About the Dependence Effect Is

question 20

Multiple Choice

Hayek's response to Galbraith's argument about the dependence effect is that:

• A) Galbraith's view is overly capitalistic.
• B) Galbraith is wrong in thinking that created desires are the most important.
• C) Galbraith is wrong in thinking that created desires are never important.
• D) Galbraith is wrong in thinking that any desires can be created in people.
• E) Galbraith is wrong in thinking that any desires are innate.

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Definitions:

Benefits-Received Principle

The concept that individuals should be taxed in proportion to the benefits they receive from government services.

Taxpayer Contributions

Monies paid into a government treasury by individuals or businesses for public use and services.

Public Expenditures

Money spent by the government on various services and projects for the public good.

Ability-to-Pay Principle

A principle in taxation that states taxes should be levied according to a taxpayer's ability to pay, typically implying higher taxes for those with higher income.