Congressman Dearmark justified spending $3 million on a new entertainment complex in his district because it will create 450 new jobs for his residents.As a student of economics,you know that
A)this is a case of the "broken window fallacy."
B)this is a great use of taxpayer dollars.
C)this policy diverts money from spending somewhere else in the economy.
D)Both a and c are correct.

Question

Quizplus · Accepted Answer

The justification given by Congressman Dearmark is an example of the "broken window fallacy," which states that spending money on something that destroys a valuable asset, such as a window or a building, leads to job creation and economic growth. However, this policy diverts money from spending elsewhere in the economy, which may lead to a better return on investment. Therefore, both option A and C are correct.

Congressman Dearmark Justified Spending $3 Million on a New Entertainment