All of the following make the use of fiscal policy less attractive EXCEPT
A) that it cannot be effective unless it is accommodated with expansionary monetary policy.
B) the substantial margin of error in the value of the multiplier.
C) the legislative lag, which is the time it takes for Congress and the President to pass and implement the measure.
D) the crowding out effect, which is the decrease in private spending that occurs due to increased government spending.
A
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Last year, Sefton purchased 60 pounds of potatoes to feed his family of five when his household income was $30,000. This year, his household income fell to $20,000 and Sefton purchased 80 pounds of potatoes
All else constant, Sefton's income elasticity of demand for potatoes is A) positive, so Sefton considers potatoes to be a normal good and a necessity. B) positive, so Sefton considers potatoes to be an inferior good. C) negative, so Sefton considers potatoes to be an inferior good. D) negative, so Sefton considers potatoes to be a normal good.
The speculative attack on the German mark in 1971 resulted in
A) a large increase in the German monetary base. B) a decline in the value of the mark relative to the dollar. C) a decision to end the floating of the mark against the dollar. D) a large decrease in the German monetary base.
Banks use repurchase agreements to
A) ensure that payments on consumer loans are made on time. B) borrow funds from business firms or other banks. C) guard against price fluctuations on long-term bonds. D) ensure that they always have enough funds on hand to meet their federal tax liabilities.
A short-run decision for a muffin shop would be to lay off some workers
Indicate whether the statement is true or false