Which of the following explains why Congress or the president might hesitate to use restrictive fiscal policy in an election year?
A. Monetary policy is always more effective.
B. Fiscal year appropriations are not under the authority of Congress.
C. Voters might become unemployed.
D. Fiscal policy is too complex.
Answer: C
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If you want to know the present value of $4,000 in two years and the annual interest rate is 5%, what formula can you use?
A) Present value = $4,000 / (0.05 ) × 2. B) Present value = $4,000 / (1 + 0.05 )2. C) Present value = $4,000 × (1 + 0.05 )2. D) Present value = $4,000 × (1 + 0.05 )/ 2.
A process is stationary if:
A. any collection of random variables in a sequence is taken and shifted ahead by h time periods; the joint probability distribution changes. B. any collection of random variables in a sequence is taken and shifted ahead by h time periods, the joint probability distribution remains unchanged. C. there is serial correlation between the error terms of successive time periods and the explanatory variables and the error terms have positive covariance. D. there is no serial correlation between the error terms of successive time periods and the explanatory variables and the error terms have positive covariance.
A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock. B. long-run demand shock. C. long-run supply shock. D. short-run demand shock.
When most shocks to the economy are external, it is generally better to have
A) a flexible rate system. B) a hard peg. C) a soft peg. D) a crawling peg.