When is it more expensive for a country to go to war – during a recession or during an economic boom? Explain
What will be an ideal response?
It is clearly more expensive for a country to go to war during an economic boom because it is more likely that the soldiers that will be serving are men and women that are already gainfully employed. Society loses the goods and services that they otherwise could have produced. However, if the country were to go to war during a recession the opportunity cost is lower because in many cases large numbers of new recruits will be drawn from the ranks of the unemployed.
You might also like to view...
According to economists Robert Lucas and Thomas Sargent, when are the gains to accurately forecasting inflation highest?
A) when inflation is high and stable B) when inflation is moderate but stable C) when inflation is high and unstable D) when inflation is low
If a French company exports $2 million of machinery to Italy and French tourists spend $2 million at Italian beaches, the Italian current account balance ________, and the Italian financial account balance ________
A) rises; rises B) rises; is unchanged C) is unchanged; is unchanged D) is unchanged; rises