Which of the following statements about the ‘Why Pay Tax?’ and ‘Sources and Uses of Tax’ sections of the lecture material are TRUE: A common ‘myth’ about taxation is that most of it goes to paying the salaries of politicians. This myth is false because the majority of government expenditure is on the provision of important services to the community and social security. There is some debate about the ‘right level’ of government involvement in the economy. Some argue that the government can solve problems in the economy better than the private sector and so advocate a larger role for government. Others advocate that excessive government involvement tends to create inefficiencies over the long-term.

Question

BlackTom AI · Accepted Answer

We start by restating the prompt and the options to ensure clarity of what is being evaluated.
Question: Which of the following statements about the ‘Why Pay Tax?’ and ‘Sources and Uses of Tax’ sections of the lecture material are TRUE: A common ‘myth’ about taxation is that most of it goes to paying the salaries of politicians. This myth is false because the majority of government expenditure is on the provision of important services to the community and social security. There is some debate about the ‘right level’ of government involvement in the economy. Some argue that the government can solve problems in the economy better than the private sector and so advocate a larger role for government. Others advocate that excessive government involvement tends to create inefficiencies over the long-term.
Options: A) Neither of the statements are true (both are false)  B) Only statement 1 is true  C) Only statement 2 is true  D) Both statements are true (neither are false)

Option-by-option analysis:
Option A: Neither of the statements are true. This would claim that both the claim about the myth and the claim about the debate on government involvement are false. However, the first claim explicitly states that the myth that most tax goes to salaries is false because most spending goes to services and social security, which is a factual assertion supported by typical governmental budgeting focuses. The second claim notes there is a debate about the appropriate level of government involvement, with arguments on both sides regarding efficiency and role. Since the two statements describe common, widely discussed points, labeling both as false would be inconsistent with the material described.

Option B: Only statement 1 is true. This would mean the first sentence about the myth being false is correct, while the second sentence about the debate on government involvement is false. The existence of a substantial policy debate on the right level of government involvement is a well-known and widely discussed topic, so this option would misrepresent the second statement’s truth value.

Option C: Only statement 2 is true. This would claim the debate on government involvement is real, but that the myth about salaries being the primary use of tax is true. The myth claim conflicts with the stated premise that most expenditure goes to services and social security, so this option misstates the first claim’s truth value.

Option D: Both statements are true (neither are false). This aligns with the standard interpretation: the myth about salaries is false because spending is primarily on services and social security, and there is ongoing debate about the appropriate level of government involvement with valid arguments on both sides about efficiency and government role over the long term.

In summary, each incorrect option incorrectly assigns truth values to at least one of the two statements, while the combination in Option D correctly reflects the described content: the myth is false, and there is a genuine debate about government involvement in the economy.

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