Review the discussion of pitfalls in economic thinking in this chapter. Then identify the fallacy or mistake in thinking in each of the following statements:

1. Raising taxes will always increase government revenues.
2. Whenever there is a recession, imports decrease. Therefore, to stop a recession, we should increase imports.
3. Raising the tariff on imported steel will help the U.S. steel industry. Therefore, the entire economy will be helped.
4. Gold sells for about $400 per ounce. Therefore, the U.S. government could sell all the gold in Fort Knox at $400 per ounce and eliminate the national debt.