Challenges Facing the Welfare State: Globalisation, Demographic Change, and Economic Theory
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Questions and Answers

According to Proposition 1, when can state intervention increase efficiency?

  • When the market is perfectly efficient
  • When all first-best assumptions hold true
  • When one or more first-best assumptions fail (correct)
  • When social justice is prioritized

    • Proposition 2 states that if no justification exists, the interests of social justice are best served by:

  • Cash transfers (correct)
  • Market competition
  • Public production and allocation
  • State intervention

    • How can social justice be improved according to the text?

  • Through market deregulation
  • By reducing government spending
  • Through cash transfers (correct)
  • By increasing corporate profits

    • Which concept justifies state intervention other than cash redistribution according to Proposition 2?

    <p>Efficiency arguments</p> Signup and view all the answers

    How can state intervention improve efficiency when first-best assumptions fail?

    <p>By public production and allocation</p> Signup and view all the answers

    What does Proposition 1 suggest may lead to an increase in efficiency?

    <p>Failure of first-best assumptions</p> Signup and view all the answers

    In what scenario does Proposition 2 recommend in-kind transfers for improving social justice?

    <p>When efficiency justifies state intervention</p> Signup and view all the answers

    Which type of arguments are required to justify state intervention other than cash redistribution?

    <p>Efficiency arguments</p> Signup and view all the answers

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