What is meant by the term "inside lags"?
What will be an ideal response?
Inside lags refers to the time it takes policy makers to formulate a corrective or stabilization policy.
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Which would not increase the productivity of labor?
A) An increase in the size of the labor force B) An increase in the quality of capital C) An increase in the quantity of capital D) An increase in technology E) An increase in the efficiency of energy
Aggressive policy measures taken by the monetary authority during the 2007-2008 financial crisis in the United States resulted in:
a. avoidance of a recession caused by a tight credit market. b. almost no transmission of the monetary stimulus to market rates of interest, increased lending, and expansion of GDP. c. lower rates of interest and increased investment activity. d. an increase of real GDP and a fall in the core unemployment rate.
If Canada has a comparative advantage over Mexico in the production of timber, then
A) the explicit cost of production for timber is lower in Canada than in Mexico. B) the opportunity cost of production for timber is lower in Canada than in Mexico. C) the implicit costs of production for timber are higher in Canada than in Mexico. D) the average cost of production for timber is lower in Canada than in Mexico.
GDP tends to underestimate the productive activity in the economy because it excludes the value of output from ________.
A. the consumption of fixed capital B. intermediate goods C. public transfer payments to households D. the underground economy