What are law-making lags? What effect do they have on the use of discretionary fiscal policy?
What will be an ideal response?
Law-making lags refer to the fact that before discretionary policy can be implemented, Congress must pass an act. There can be significant time involved for Congress to debate and reach consensus on a specific piece of legislation. The time it takes is called the "law-making lag." Law-making lags make discretionary fiscal policy more difficult because by the time the policy is actually implemented, the state of the economy might have changed and so the newly enacted discretionary fiscal policy might now be the wrong policy.
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Use the following graph for a competitive market to answer the question below
A price ceiling of $25 per unit will result in
A. a surplus of 200 units. B. the market staying at the equilibrium quantity of 150. C. a shortage of 200 units. D. a shortage of 150 units.
Normative analysis:
A. involves the formulation and testing of hypotheses. B. is a value-free evaluation of a policy. C. is a matter of values and opinions. D. examines if the policy actually accomplished its goal.
Which of the following is an example of a resource?
a. Land b. Capital c. Entrepreneurship d. All of the above are resources
The Laffer curve shows as tax rates rise, tax revenue:
A. rises. B. first rises, then falls, and then rises again. C. falls. D. first rises, and then falls.