Ostrem ch. 9 Question 7

I learned a little bit about fiscal policy in the government. When citizens sense that a recession is coming, they may think to themselves that they need to stop spending and start saving their money. Though it sounds logical, this is actually awful for preventing a recession. As Wheelan said "Indeed, if we all believe the economy is likely to get worse, then it will get worse." In fiscal policy, the government uses tax revenue to spend money into the economy. When people stop spending in an effort to save their money, meanwhile the government can spend money to build bridges and highways. This puts construction workers back to work. And it helps reverse the recession.