What is the essence of the problem of timeliness with fiscal policy?
A. Often there is not enough time to spend all of the money that fiscal policies have authorized.
B. If fiscal policy is enacted too quickly, it might not be very well thought out.
C. In order for fiscal policy to have an impact and prevent a recession, it needs to happen very quickly.
D. The government's budget calendar is very strict and fiscal policy can only be done at certain times in the year.
Answer: C. In order for fiscal policy to have an impact and prevent a recession, it needs to happen very quickly.
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Which of the following is NOT included in the money supply when the transactions approach is used?
A) currency B) traveler's checks C) money market deposit accounts D) transaction deposits
A way in which government can attempt to solve the problems caused by information asymmetry in the marketplace is:
A. signaling. B. statistical discrimination. C. mandating that information be shared. D. All of these are ways the government deals with information asymmetry.
The term "open market operations" refers to the:
A. loan-making activities of commercial banks. B. effect of expansionary monetary policy on interest rates. C. operation of competitive markets in the banking industry as the result of deregulation. D. buying and selling of government securities by the Federal Reserve.
Which of the following changes shifts the AD curve down and to the left?
A. A decrease in income taxes B. An increase in the future marginal productivity of capital C. A decline in the nominal money supply D. A decrease in the risk on nonmonetary assets