Answer to Question 2:

Increased intergenerational growth of per capita income resulting from forced saving and government restrictions on family size will necessarily increase welfare.

True or false?


The statement is false. The welfare of subsequent generations will increase to the extent that they have higher per capita income than would otherwise be the case, but the welfare of the current generation could well be lower because they would have preferred to save less and have more children, even though those children would not ultimately be as well off. To the extent that this generation is in a less preferred position, it is worse off.

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