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Some economists argue that fiscal policy is an ineffective form of government intervention. Discuss fiscal policy and its effectiveness in stabilizing the economy.
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Economics- CIA 4U0 Final Summative Evaluation Part A - Essay B) Some economists argue that fiscal policy is an ineffective form of government intervention. Discuss fiscal policy and its effectiveness in stabilizing the economy. Malvinder Garcha CIA 4U0 Mrs. Wallace Due: Friday, January 20th, 2006 Effectiveness of Fiscal Policy As an economy experiences periodic swings in aggregate demand and real output throughout its business cycle, the government must intervene and dissolve the instability through means of policies; but this was not always thought to be the solution. From the years 1929-1939, the world experienced a global recession for the first time in history, known as the Great Depression (http://en.wikipedia.org/wiki/The_Great_Depression). The depression stunted every aspect of economic growth as banks failed, unemployment was high, GDP drastically dropped, and the stock market plummeted; leaving economists in disbelief. Theories of all sorts varied from economist to economist, but some, such as that of Adam Smith, were greatly emphasized. Smith believed in...
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