The various time lags involved with fiscal policy imply that
A. fiscal policy may often be destabilizing if the policy effects occur after the need is over.
B. when fiscal policy is carefully coordinated, it can quickly move to keep the economy at the full-employment level of real GDP.
C. fiscal policy is most effective as a short-run measure to fine tune the economy's quarterly ups and downs.
D. fiscal policy is effective only slowly, but the slowness ensures that it is effective in the long run.
Answer: A
You might also like to view...
Refer to Table 9-11. Prior to trade, what was the opportunity cost to produce 1 clock in Belize?
A) 1/2 of a hat B) 2/3 of a hat C) 1.5 hats D) 2 hats
Abigail wishes to spend more time this week studying for her classes. Using the idea of a production possibilities curve, and assuming Abigail is currently spending all of her time efficiently, Abigail can spend more time studying this week only if
a. she also spends more time doing other things. b. she spends less time doing other things. c. Daylight Savings Time begins this week, so everyone moves their clocks ahead one hour. d. none of the above.
Which of the following examples would most likely have elastic demand?
a. cigars for a chain smoker b. crackers for a person who likes to snack c. cocaine for an addict d. medicine for a person with blood clots
Explain how an increase or decrease in demand and supply will affect the value of a nation’s currency.
What will be an ideal response?