An economic analysis concludes that a government program paying firms a portion of their employees' wages will unequivocally lead to higher overall employment and increased take-home pay for workers. The analysis, however, does not specify how the government will raise the money to pay for this program. Based on this omission, what is the most significant limitation of this analysis when considering its real-world application?

A government policy that provides payments to firms to lower their cost of hiring will always result in a net increase in total employment, regardless of how the government raises the funds for these payments.

Evaluating Economic Models

Critique of a Policy Proposal