财政学哈维罗森第七版课后习题答案

财政学哈维罗森第七版课后习题答案 Instructors Manual to accompany Public Finance Seventh Edition by Harvey S Rosen Suggested Answers to End-of-Chapter Discussion Questions Some of the questions have no single correct answer – reasonable people can go off in different directions In such cases the answers provided here sketch only a few possibilities Chapter 1 - Introduction 1 a Putins statement is consistent with an organic conception of government Individuals and their goals are less important than the state Rehnquist makes a clear statem ent of the mechanistic view of the state 2 a A person with an organic conception of the state might react favorably arguing that even if an individual owner is worse off because he must show only French movies the nation is better off because it achieves more unity A libertarian would certainly reject this policy and the reasoning behind it -- there is no national interest independent of the interests of individuals and people should have the right to run their lives in the way that they prefer -- including seeing whatever movies they want A social democrat would try to balance these two aims and it is hard to predict how he or she would come out 3 The mechanistic view of government says that the government is a contrivance created by individuals to better achieve their individual goals Within the mechanistic tradition people could disagree on the obesity tax Libertarians would say that people can decide what is best for themselves - whether to consume high calorie food - and do not need prodding from the government In contrast social democrats might argue that people are too short sighted to know what is good for them so that government-provided inducements are appropriate 4 a If the size of government is measured by direct expenditures the mandate does not directly increase it Costs of compliance however may be high and would appear as an increase in a regulatory budget Its hard to say whether this represents an increase or decrease in the size of government One possibility is that GDP stayed the same and government purchases of goods and services fell Another is that government purchases of goods and services grew but at a slower rate than the GDP One must also consider coincident federal credit and regulatory activities and state and local budgets The federal budget would decrease if grants-in-aid were reduced However if state and local governments offset this by increasing taxes the size of the government sector as a whole would not go down as much as one would have guessed 5 The inflation erodes the real value of the debt by 0021 x ,311 billion or ,65 billion The fact that inflation reduces the real debt obligation means that this figure should be included as revenue to the government 6 The federal government grew by 450 billion However because the price level went up by 16 percent in terms of 2001 dollars this amounted to a real increase of 224 billion 186 trillion - 116141 trillion186 trillion-164 trillion Note that the increase in prices of 16 percent in the Rosen text p 18 differs from official sources According to the 2004 Economic Report of the President Table B-60 the CPI-U was 1771 in 2001 and was 1445 in 1993 an increase of 225 percent not 16 percent If one uses these numbers government spending increased in constant 2001 dollars from 172 trillion in 1993 to 186 trillion or 140 billion As a proportion of GDP federal spending in 1993 was 212 percent and in 2001 it was 182 percent Hence by one measure the size of government fell and by the other measure it grew To get a more complete answer one would want data on the population to compute real spending per capita Also it would be useful to add in expenditures by state and local governments to see if the total size of government fell Also although it would be harder to measure one would want to try to gain some sense of how the regulatory burden on the economy grew during this time period Chapter 2 – Tools of Positive Analysis 1 The reality that astronomers are trying to understand is not influenced by any policies that astronomers might implement That is planets and stars do act any differently when they are being analyzed whereas people can change their behavior Moreover the parameters with which astronomers must deal are constant over time at least in the short-run of hundreds of years while the parameters in economics can quickly change over time and across geography 2 A change in the marginal tax rate changes the individuals net wage This generates both an income effect and a substitution effect As long as leisure is a normal good these effects work in opposite directions Hence one cannot tell a priori whether labor supply increases or decreases One could ask taxpayers to describe how they would change their behavior under the proposal but it is hard to imagine that this would yield useful results In a social experiment a control group w