1,Think back to August 6, 1945. The United States has just dropped an atomic weapon on the city of Hiroshima killing tens of thousands of Japanese and devastating the infrastructure. A Keynesian at that time might conclude that there is a silver lining in the destruction, as economic prosperity will result. Evaluate the logic of this claim in a few sentences.
1,Think back to August 6, 1945. The United States has just dropped an atomic weapon on the
city of Hiroshima killing tens of thousands of Japanese and devastating the infrastructure. A
Keynesian at that time might conclude that there is a silver lining in the destruction, as
economic prosperity will result. Evaluate the logic of this claim in a few sentences.
2,Most introductory economics textbooks have a section on “market failure.” It is here that
students learn that markets may fail to achieve their potential – leaving people worse off than
they theoretically could be. The existent of market failure is often taken as an excuse for
government intervention to do whatever markets fail to do. In just a couple of sentences, explain
why economists (and others, particularly politicians) must accept the possibility of “government
failure” as well? That is, tell me why government solutions to perceived market “failures” may
themselves fail to achieve their own stated goals? The U.S. Drug war is an apt example of a
discrepancy between a stated political policy goal and the actual attainment of that goal.
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