In 2010, the co-chairmen of President Obama's deficit reduction commission proposed curtailing or eliminating many tax deductions such as the one for mortgage interest. Economists who favor the proposal argue that it would
(i)correct a misallocation of resources because too much of the economy's capital stock is tied up in residential housing and too little is invested in corporate capital.
(ii)cut both spending and taxes.
(iii)encourage private philanthropy.
A)(i) only
B)(ii) only
C)(i) and (ii) only
D)(i), (ii), and (iii)

Question

Quizplus · Accepted Answer

(i) and (ii) are both correct. The proposal would correct a misallocation of resources because too much of the economy's capital stock is tied up in residential housing and too little is invested in corporate capital. It would also cut both spending and taxes.

In 2010, the Co-Chairmen of President Obama's Deficit Reduction Commission