Determine the laws to smooth out the given fluctuations

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Question: In India, the economy grows faster when there's a lot of rain and grows more slowly when there is a drought. This creates big fluctuations in the economy. If the government wrote laws to smooth out these fluctuations by paying people to work more in the dry years and by taxing people so that they would work less in the heavy-rain years, would that make the average Indian better off? Why or why not? (Keep your answer in mind during the next recession, when pundits and politicians recommend tax breaks to encourage more hiring.)

Reference no: EM131833186

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