Policymakers may be uncertain about the structure of the economy because
A. initial releases of data may be less accurate than later data releases.
B. they are not aware of modern macroeconomic modeling techniques.
C. they don't know the predominant source of shocks to the economy.
D. they don't know how shocks affect people's expectations.
Answer: C
You might also like to view...
Suppose the president is successful in passing a $5 billion tax increase. Assume that taxes are fixed, the economy is closed, and the marginal propensity to consume is 0.75. What happens to equilibrium GDP?
A) There is a $20 billion decrease in equilibrium GDP. B) There is a $15 billion decrease in equilibrium GDP. C) There is a $15 billion increase in equilibrium GDP. D) There is a $20 billion increase in equilibrium GDP.
Commercial paper has a minimum maturity of
A) one day. B) seven days. C) 30 days. D) 270 days.
In 2011, the average American paid approximately how much to the federal government in taxes?
a. $2,000 b. $2,500 c. $8,000 d. $10,500
A new technology is developed for producing microwave ovens that reduces production costs by 10%. Which of the following is the most likely consequence of this technological change?
A. Firms will continue to operate efficiently as long as no firm adopts this new technology. B. Firms must adopt this new technology to remain efficient. C. If firms do not adopt this new technology, then the economy will remain in general equilibrium, because firms will not change their price and output decisions. D. This new technology will not affect efficiency, but it will change the equilibrium price and quantity for this industry.