The time it takes the Fed to formulate a policy is referred to as:
A. the inside lag for monetary policy.
B. the inside lag for fiscal policy.
C. the outside lag for monetary policy.
D. the outside lag for fiscal policy.
Answer: A
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Identify the best reason for regulating a natural monopoly
a. A natural monopoly can serve the entire market at a lower average cost than if two or more smaller firms split the market and compete against each other. Thus consumers can benefit from the existence of monopoly, and regulators must protect consumers by regulating the monopoly's price. b. A natural monopoly is a high-cost producer that creates significant employment opportunities in an economy. Thus regulators must protect them from competition. c. A natural monopoly is a large firm whose production depends largely on the natural resource endowment in a country. Regulators must control the prices of their products to help them maintain the high cost of sustainable resource management. d. A natural monopoly is a large firm that creates negative production externalities in an economy. Thus regulators impose lumpsum taxes on their produce and redistribute the proceeds to correct these negative externalities.
What is the opportunity cost of going from point D to point C?
Along a downward-sloping, linear demand curve, total revenue is the greatest
A) where demand is normal. B) where demand is the most inelastic. C) where demand is the most elastic. D) where demand is unit elastic.
In explaining the evolution of money
A) government regulation is the most important factor. B) commodity money, because it is valued more highly, tends to drive out paper money. C) new forms of money evolve to lower transaction costs. D) paper money is always backed by gold and therefore more desirable than checks.