Agreement and disagreement among economists Suppose that Manuel, an economist from a university in Arizona, and Poornima, an economist from a university in Massachusetts, are arguing over government intervention. The following dialogue shows an excerpt from their debate: Poornima: The usefulness of government intervention in the economy is a long-standing issue that economists continue to debate. Manuel: I feel that government involvement in the economy should be reduced because government programs cause more harm than good. Poornima: While I do agree that government programs can be inefficient, I really think they are necessary to help the less fortunate. The disagreement between these economists is most likely due to Despite their differences, with which proposition are two economists chosen at random most likely to agree? Central banks should focus more on maintaining low unemployment than on maintaining low inflation. Business managers can raise profit more easily by reducing costs than by raising revenue. Employers should not be restricted from outsourcing work to foreign nations.
The Correct Answer and Explanation is:
Correct Answer: Employers should not be restricted from outsourcing work to foreign nations.
Explanation:
In the given dialogue, Poornima and Manuel express differing views on government intervention in the economy. Manuel is skeptical of government programs, suggesting they cause more harm than good. Poornima acknowledges inefficiencies but supports such programs to assist the less fortunate. Their disagreement likely stems from differences in political philosophy and values. Manuel likely prioritizes market efficiency and limited government, while Poornima values equity and support for vulnerable populations. This kind of disagreement is common among economists, especially when value judgments and public policy implications are involved.
However, despite these differences, economists generally agree on several key principles of international economics and trade. One of the strongest points of agreement is that free trade tends to benefit economies overall, even if it comes with some costs to specific groups or industries. Thus, the statement:
“Employers should not be restricted from outsourcing work to foreign nations”
reflects a market-friendly stance that economists across the ideological spectrum typically support. Most economists believe that outsourcing allows firms to lower costs, increase productivity, and allocate resources more efficiently. Although there are short-term negative effects on domestic employment in some sectors, the broader economic consensus supports outsourcing as part of a comparative advantage strategy that improves overall welfare.
On the other hand, the propositions regarding focusing more on unemployment than inflation or choosing to cut costs instead of raising revenue are more context-dependent and can vary significantly depending on the economic environment or business structure. These are not areas with as strong a consensus among economists as the topic of free trade and outsourcing.
Therefore, even though economists may differ in their political or philosophical views on government intervention, they are most likely to agree on the value of outsourcing and free trade as beneficial for economic efficiency and growth.
