Expansion in the Size of Government Relative to the Market

question 87

Multiple Choice

Expansion in the size of government relative to the market sector will eventually retard economic growth because

• A) larger governments will be more involved in activities for which they are ill-suited.
• B) the higher taxes to finance a bigger government will lead to larger and larger deadweight losses from taxation.
• C) the incentive to engage in innovative activities and respond to change is weaker in government than in the market sector.
• D) all of the above are correct.