Neha: i think it’s safe to say that, in general, the savings rate of households in today’s economy is much lower than it really needs to be to sustain the improvement of living standards.
lorenzo: i think a switch from the income tax to a consumption tax would bring growth in living standards.
neha: you really think households would change their saving behaviour enough in response to this to make a difference? because i don’t.

Hello. This question is incomplete. The complete question would be:

"Neha: I think it’s safe to say that, in general, the savings rate of households in today’s economy is much lower than it really needs to be to sustain the improvement of living standards.

Lorenzo: I think a switch from the income tax to a consumption tax would bring growth in living standards.

Neha: You really think households would change their saving behaviour enough in response to this to make a difference? Because I don’t. The disagreement between these economists is most likely due to . A. Difference in values, B. Difference in scientific judgements, C. Difference in perception versus reality"

C. Difference in perception versus reality

Explanation:

Lorenzo and Neha are disagreeing with how the savings rate and income tax will interfere with family life. While Lorenzo thinks that changes in income tax would interfere with household savings rates and contribute to better living standards, Neha believes that this change would not be so beneficial and would not change household saving behavior. As you can see, Neha and Lorenzo are discussing how concepts interfered with reality, so we can say that they are in disagreement because of the difference in perception versus reality.

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