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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

The debate over using government spending and taxing powers to stabilize the economy involves more than technical economic issues. Do you agree or disagree? Explain your answer.

To determine

Identify the technical economic issues associated with the government policies.

Explanation

There are mainly two technical issues associated with the government spending and taxing policies to stabilize the economy.  They are listed below:

  • Crowding out: Identify whether the crowding out that occurs or not in the economy is one of the economic issues.
  • Existence of lags: The presence of fiscal policy lags and how they affect the effectiveness of fiscal policy is another technical and economic issue of the government policy...

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