Author Question: What are the three ways that the government redistributes income in the United States? Briefly ... (Read 78 times)

crobinson2013

  • Hero Member
  • *****
  • Posts: 535
What are the three ways that the government redistributes income in the United States? Briefly discuss each.
 
  What will be an ideal response?

Question 2

Evaluate the following statement. The nation of Berundi has an absolute disadvantage in the production of everything compared to the United States. Therefore, the United States will have no reason to trade with Berundi.
 
  What will be an ideal response?



durant1234

  • Sr. Member
  • ****
  • Posts: 338
Answer to Question 1

The government redistributes income using income taxes, income maintenance programs, and subsidized services. Income taxes redistribute income because they are generally progressive so that higher-income households pay more in income taxes than lower-income households. In addition, poor households receive money from the income tax through the earned income credit. Income maintenance programs are programs such as social security, unemployment compensation, and welfare. These programs tend to give more income to poorer households than richer households. Finally, the government provides subsidized services, such as below-cost health care and below-cost schooling.

Answer to Question 2

This statement is false. The reason is that nations don't trade according to their absolute advantage but rather their comparative advantage. Even though the nation of Berdundi has an absolute disadvantage in the production of everything it is very unlikely that it won't have a comparative advantage in the production of at least one good or service vis--vis the United States.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

The average human gut is home to perhaps 500 to 1,000 different species of bacteria.

Did you know?

In 1886, William Bates reported on the discovery of a substance produced by the adrenal gland that turned out to be epinephrine (adrenaline). In 1904, this drug was first artificially synthesized by Friedrich Stolz.

Did you know?

Adult head lice are gray, about ? inch long, and often have a tiny dot on their backs. A female can lay between 50 and 150 eggs within the several weeks that she is alive. They feed on human blood.

Did you know?

Addicts to opiates often avoid treatment because they are afraid of withdrawal. Though unpleasant, with proper management, withdrawal is rarely fatal and passes relatively quickly.

Did you know?

Disorders that may affect pharmacodynamics include genetic mutations, malnutrition, thyrotoxicosis, myasthenia gravis, Parkinson's disease, and certain forms of insulin-resistant diabetes mellitus.

For a complete list of videos, visit our video library