The amount of time that it takes between recognizing an economic problem and implementing policy to solve it is
A) the recognition time lag. B) the effect time lag.
C) the action time lag. D) fiscal policy.
C
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If the nominal interest rate in an economy is 4% and the real interest rate in the economy is 2%, the rate of inflation in the economy must be:
A) -2%. B) 4%. C) 2%. D) 0.5%.
Suppose you find $1000 in your attic and decide to deposit it all into your local bank, which must hold 10% as required reserves. The deposit expansion multiplier suggests that this $1,000 "injection" of new money can, in the theoretical limit,
A) increase the money supply by a little more than $1,000. B) increase the money supply by a little less than $1,000. C) increase the money supply by only $1,000. D) increase the money supply by $10,000.
Using the long-run ISLM model, explain and demonstrate graphically the neutrality of money, for the case of an increase in the money supply
What will be an ideal response?
If Apple's iTunes Music Store increases its "fee" for its music downloads, the law of demand predicts that
A) the number of iTunes music downloads would increase. B) there would be no change in the demand for iTunes music downloads. C) the number of iTunes music downloads would decrease. D) iTunes music supply would change but demand would not.