Stabilization policy is to be applied if all of the following applies except

A) authorities have good information about the state of the economy.
B) policies can be applied quickly.
C) markets are out of equilibrium.
D) there is no output gap.


D

Economics

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Which of the following is most likely if there is a war that destroys a country's stock of capital to a level below the steady state equilibrium?

A) The GDP will be equal to the steady-state equilibrium level of GDP. B) The investment in capital will suffice to replenish the depreciating capital. C) The GDP will be more than the steady-state equilibrium level of GDP. D) The investment in capital will be lower than the amount required to replenish the depreciating capital.

Economics

Suppose that there is a negative aggregate supply shock and the central bank commits to an inflation rate target

A) If the commitment is credible, the public's expected inflation will remain unchanged. B) Credible policy produces better outcomes on both inflation and output in the short run. C) Policies that are not credible produce worse economic contraction. D) all of the above. E) both A and C.

Economics

The impact effect is the

A) zero period dynamic multiplier. B) h period dynamic multiplier, h>0. C) cumulative dynamic multiplier. D) long-run cumulative dynamic multiplier.

Economics

The typical total profit graphical presentation is shown as

a. a square. b. a rectangle. c. a hill, or mound. d. an S curve.

Economics