Economics (MindTap Course List)
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Economics (MindTap Course List)
Not all economists agree on what constitutes the optimal size and scope of government. Therefore, they won’t all agree as to the preferred fiscal policy measure to stimulate the economy: increased government purchases or tax cuts. Do you agree or disagree that some economists would prefer to increase government purchases to stimulate the economy while others would prefer to cut taxes? Explain your answer.
Acceptability of the statement.
The given statement is acceptable. Some economists argued that governments have optimal size and scope, and it is greater than the present size and scope. If the size and scope are greater than the present size and scope, then the economists recommend to increase the government purchase in excess of the tax cuts. Thus, the economists believe that an expansionary fiscal policy is necessary for stimulating the economy...
Chapter 18 Solutions
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