Which of the following is not a weakness of fiscal policy?
a. Implementation of policy is difficult
b. Time lags in fiscal policy are long and variable.
c. Fiscal policy works only during periods of stagflation.
d. Fiscal policy often affects only current income, but many economic decisions are made on the basis of permanent income.
e. Fiscal policy might have undesirable long-term effects on short-run aggregate supply.
c
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If there is an inverse relationship between two variables, the graph of this relationship
A) will be a horizontal line. B) will be downward-sloping. C) might be horizontal. D) will be upward-sloping.
Refer to Figure 17-7. Consider the Phillips curves depicted in the graph above. The Fed announces its intention to decrease inflation from 10 percent to 5 percent per year, and it succeeds
If the assumptions of the rational expectations school hold true, and the Fed's announcement is credible, the rate of unemployment will be ________ in the short run. A) less than 5.5 percent B) 5.5 percent C) between 5.5 and 7.5 percent D) 7.5 percent
Foreign direct investment is defined as
A) the acquisition of more than 10 percent of the shares of ownership in a company in another nation. B) funds allocated into a foreign stock market that represent an ownership share of firms less than 5 percent. C) purchasing both capital equipment and government bonds abroad. D) purchasing government bonds.
Suppose when you are 21 years old, you deposit $1,000 into a bank account that pays annual compound interest, and you do not withdraw from the account until your retirement at the age of 65, 44 years later. How much more will be in your account if the interest rate is 6 percent rather than 4 percent?
A. $2,390 B. $5,617 C. $880 D. $7,369