A difficulty with effective fiscal policy is the:
A. reality of time lags.
B. guess as to what potential GDP is.
C. lack of relevant information needed to decide the magnitude of change.
D. All of these are true.
D. All of these are true.
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Refer to the figure above. The triangular region ABC represents the ________
A) deadweight loss due to the presence of a pecuniary externality B) deadweight loss due to the presence of a negative externality C) economic loss of not recognizing a positive externality D) inefficiency created by not recognizing a negative externality
If a dollar currently purchases 12.5 pesos and someone forecasts that in a year it will purchase 14 pesos, then the forecast is given in
a. real terms and implies the dollar will appreciate. b. real terms and implies the dollar will depreciate. c. nominal terms and implies the dollar will appreciate. d. nominal terms and implies the dollar will depreciate.
Which of the following policy actions by the Fed is likely to cause the money supply to decrease?
A. An open market purchase B. A decrease in required reserve ratios C. A decrease in the discount rate D. An open market sale
Draw the demand curve for a good whose price elasticity of demand is equal to infinity. Be sure to label both axes.
What will be an ideal response?