Some of the questions are painfully ambiguous:
| 30) Which of the following fiscal policy combinations would a government most likely follow to stimulate economic activity when the economy is in a severe recession? |
Results:
You answered 27 out of 33 correctly — 81.82 %
Average score for this quiz during October: 76.8%
I'll admit to one brain fart, 2 cases of not having studied Greek philosophy, and am willing to argue the remaining 3. See above.
1 comment:
Most government and some skilled economists believe that government spending, especially deficit spending, stimulates a weak economy.
I believe those that point to history and claim it doesn't work, I believe the competent economists that evaluate the strategy and claim it shouldn't work. But, like weaseling around the Constitution, deficit spending as a "good" thing is part of our national heritage.
Personally I think the strategy is published as an ass-covering, image management tactic, since spending during economic crisis can be seen by the cynical as a wonderful time to be buying votes and voters. Thus the government spending "to stimulate the economy".
Decreasing taxes is the only government strategy that has actually been seen to improve the economy. Surprisingly, it also tends to increase tax revenue, at least surprising to those out to ride voter anger into office.
Not surprisingly, raising taxes is also seen as "doing the tough jobs" and "punishing the greedy, thieving rich industrial pirates" and at times a successful voter and vote buying strategy, though it demonstrably and reliably puts people out of work.
So increasing government spending is a given. When the voters think there is an economic problem, then politicians often have to relent on the raising taxes part, 'cause it looks stupid even to most voters.
At least, that seems to cover what I see happening.
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