The Fallacy of the Broken Window Suggests That the Repair

question 79

Multiple Choice

The fallacy of the broken window suggests that the repair costs of a broken window:

• A) increase total spending and stimulate the economy.
• B) are offset by reductions in other spending and thus do not stimulate the economy.
• C) reduce total spending because shopkeepers save more to be prepared for other emergencies.
• D) increase total spending but do not stimulate the economy.

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Definitions:

Delusions

Fixed false beliefs that are resistant to reason or confrontation with actual fact, commonly observed in psychiatric conditions.

Hallucinations

Perceptions that occur without an external stimulus, but which have the compelling sense of reality of true perceptions.

Agoraphobia

Anxiety disorder characterized by fear of places and situations in which it would be difficult to escape, such as enclosed places, open spaces, and crowds.

Paranoia

A mental condition characterized by delusions of persecution, unwarranted jealousy, or exaggerated self-importance, typically worked into an organized system.