Homework Clinic
Social Science Clinic => Economics => Topic started by: 123654777 on Jun 29, 2018
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Your younger brother likes to yell at the dinner table so the rest of the family will give him what he wants. Assume that this has proved quite successful for him time and again.
Let's say that you are from a family of eight and every member of your family starts to adopt the same strategy. Would this work? Why or why not? Explain.
Question 2
Contractionary fiscal policy involves decreasing government purchases or increasing taxes.
Indicate whether the statement is true or false
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Answer to Question 1
This strategy will probably not work very well. With everyone yelling at the table it is unlikely that anyone will get heard. This is what is known as the fallacy of composition. What is good for the individual is not necessarily good for the whole.
Answer to Question 2
TRUE