How might increasing the level of government transfers reduce the size of the economic pie? check all that apply?

1 answer:

8 0

Since the increasing level of government transfers only transfers the wealth without actual creation of goods/services, Higher taxes may be necessary to finance increased transfer payments, leading to a reduction in hours worked because of a decrease in the reward for productive activity. Not only that, <span>.Greater transfer activity diverts productive resources into rent-seeking activity</span>

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