Suppose current government spending increases and that individuals expect future government spending to increase. Given this information, in which of the following cases will output in the current period be more likely to decrease?
A) Individuals consider only the short run effects of changes in future macro variables when forming expectations of future output and future interest rates.
B) Individuals consider only the medium run effects of changes in future macro variables when forming expectations of future output and future interest rates.
C) Individuals consider only the long run effects of changes in future macro variables when forming expectations of future output and future interest rates.
D) The output effects will be the same in B and C.
C
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A tariff is the same as a quota
Indicate whether the statement is true or false
When money prices are used to facilitate comparisons of value, money is said to function as a
A) unit of account. B) medium of exchange. C) store of value. D) payments-system ruler.
Which of the following accurately describes how earnings from capital eventually get paid to households?
a. Households can own a stock of capital and rent it to firms. b. Households lend money to firms, who then pay interest to the households. c. Households that own stock in firms receive dividends. d. All of the above are correct.
Two firms, Kegareta Inc. and Sucio Enterprises, have access to five production processes, each one of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the accompanying table. ABCDE 4 tons/day3 tons/day2 tons/day1 tons/day0 tons/dayKegareta Inc.$40$85$135$190$250Sucio Enterprises$120$175$250$345$460 Suppose the government wants to reduce pollution by 50 percent by imposing a tax of $T per day on each ton of smoke emitted. Of the options listed, what's the smallest tax, $T, that will achieve this goal?
A. $51 B. $61 C. $56 D. $54