Suppose that in an economy, households like to watch a TV show called Econ320. Like all TV shows, Econ320 makes people sometimes laugh, while some other times, it makes people cry. As a result, the household can be either optimistic or pessimistic depending on the particular episode they watched the night before. When households are optimistic, their productivity is high, while when they are pessimistic, they believe the productivity is low. Suppose that there is more than one TV show available so that households can have different moods. Explain whether or not the government should intervene in some way in this economy to stabilize economic fluctuations (by controlling the shows they watch and change their moods and thus productivity.) PLEASE PROVIDE DETAILED EXPLANATION, THANKS.
Suppose that in an economy, households like to watch a TV show called Econ320. Like all TV shows, Econ320 makes people sometimes laugh, while some other times, it makes people cry. As a result, the household can be either optimistic or pessimistic depending on the particular episode they watched the night before. When households are optimistic, their productivity is high, while when they are pessimistic, they believe the productivity is low. Suppose that there is more than one TV show available so that households can have different moods. Explain whether or not the government should intervene in some way in this economy to stabilize economic fluctuations (by controlling the shows they watch and change their moods and thus productivity.) PLEASE PROVIDE DETAILED EXPLANATION, THANKS.
