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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

According to Buchanan and Wagner, why is there a political bias toward expansionary fiscal policy and not contractionary fiscal policy?

To determine

Identify the political bias toward the expansionary fiscal policy.    

Explanation

According to B and W, there is a political bias toward the expansionary fiscal policy. The main reason is that an expansionary fiscal policy increases the spending benefits and reduces the tax rates. Thus, it is more acceptable among individuals than a contractionary fiscal policy. Although in an economy the fiscal policies needed to change as per the changes in economic conditions, an expansionary policy i...

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