What are lawmaking lags? What effect do they have on the use of discretionary fiscal policy?
What will be an ideal response?
Lawmaking lags refer to the fact that before discretionary policy can be implemented, Congress must pass an act. There can be significant time involved for Congress to debate and reach consensus on a specific piece of legislation. The time it takes is called the "lawmaking lag." Lawmaking lags make discretionary fiscal policy more difficult because by the time the policy is actually implemented, the state of the economy might have changed and so the newly enacted discretionary fiscal policy might now be the wrong policy.
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Suppose that you know a good is a normal good for a consumer. Which of the following can you then conclude to be true:
A. The own-price elasticity of demand is less than -1. B. The income elasticity of demand is greater than 0. C. The own-price elasticity of demand is greater than -1. D. The income elasticity of demand is less than 0. E. Both (a) and (b). F. Both (a) and (d). G. Both (b) and (c). H. None of the above.
Because barriers to entry limit the amount of competition in various markets, government policy should be designed to reduce or eliminate such barriers wherever possible
Indicate whether the statement is true or false
Whenever any firms in a concentrated industry merge, the Herfindahl-Hirschman Index: a. will rise
b. may rise or stay the same. c. may rise or fall. d. will fall.
London drivers who choose to drive in "congestion zones" pay a tax designed to reduce traffic congestion
a. True b. False Indicate whether the statement is true or false