Explain the three lags that make it difficult to time changes in discretionary policy properly
The recognition lag is the period between when economic conditions have changed and when policy makers recognize the change. The administrative lag is the time between when the need for policy is recognized and when the policy change is implemented. The impact lag is the time between the implementation of a policy change and when the change actually exerts its primary impact on the economy.
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An operational lag is the time taken by policymakers to recognize the existence of an economic expansion or recession
a. True b. False Indicate whether the statement is true or false
Over the past century, the average income in the United States has risen about
a. twofold. b. fivefold. c. eightfold. d. tenfold.
When money serves as a means for determining the relative worth of goods, services, and resources, it is functioning as a:
A. standard of deferred payment. B. store of value. C. unit of account. D. medium of exchange.
Which of the following represents the general rule of hiring for a firm?
A. Average revenue product equals the wage rate. B. Total physical product equals marginal factor cost. C. Marginal cost equals marginal revenue. D. Marginal revenue product equals marginal factor cost.