The time-inconsistency problem is likely to arise in Cadmia if _____
a. attempts are made to coordinate monetary policy with fiscal policy
b. there is a lag between the announcement of a monetary policy and its implementation
c. policy makers initially aim to keep the price level stable but do not follow through as promised
d. policy makers do not allow enough time for a new policy to take effect
e. there is a deep conflict among monetary policy makers
c
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Why do investors hedge using futures contracts?
A) they are seeking to increase liquidity B) they are willing to pay for a reduction in risk C) in order to provide a counterparty to speculators D) they are more flexible than forward contracts
When a large shareholder or a group solicits vote for a slate of directors that it has proposed as an alternative to candidates endorsed by the current board, a(n) _____ takes place
a. acquisition b. proxy fight c. merger d. leveraged buyout
Which of the following about Social Security is true?
a. Labor participation tends to increase as spousal earnings increase. b. Social Security works to the disadvantage of low-wage workers due to their shorter life expectancy. c. Low-wage workers derive a higher rate of return from their Social Security taxes than high-wage workers. d. High-wage workers generally begin full-time work at younger ages than low-wage workers.
In a constant cost industry, the only long-run effect of an increase in demand is ______.
a. an increase in industry output b. an increase of input prices c. a decrease in the number of suppliers d. an increase in the long-run equilibrium price