Which of the Following Statements Describes a Major Contradiction Faced

question 12

Multiple Choice

Which of the following statements describes a major contradiction faced by developed democracies in their attempts to maintain the welfare state?

• A) The problem could be mitigated by accepting more immigrants, but that creates a new problem because citizens are largely unwilling to extend benefits to immigrants.
• B) One possible solution is to cut back on benefits, but benefits have already decreased as revenues have shrunk, and yet the problem has not diminished.
• C) Expanding the labor market through measures like increased retirement age is a potential solution, but so far advanced democracies have only proved to be willing to shrink the labor market.
• D) A shift back to industrial labor would provide more concrete employment and benefits for many, but such a move would reduce the overall revenue of the state.

---

Definitions:

Marginal Tax Rate

The tax rate that applies to the next dollar of taxable income, indicating how much of any additional income will be taken in taxes.

Sales Tax

A consumption tax imposed by the government on the sale of goods and services.

Structural

Relating to the underlying or foundational aspects or structures of a system, organization, or building.

Lump-Sum Tax

A tax that is a fixed amount and does not vary with the taxpayer's income or consumption levels.