Which of the following examples shows a timing problem with monetary policy?
a. Three months after the Fed increases the money supply, political events increase consumer confidence.
b. When the Fed decreases the money supply, disinflation gradually takes place.
c. After the Fed increases the money supply, foreign firms buy more U.S. exports.
d. Two months after the Fed decreases the money supply, economists realize they miscalculated the real output.
a. Three months after the Fed increases the money supply, political events increase consumer confidence.
You might also like to view...
Which of the following is likely to happen when the interest rate falls?
A) The volume of economic activity will reduce. B) The labor demand curve will shift to the left. C) Equilibrium wage rate will fall. D) The labor demand curve will shift to the right.
The Baumol-Tobin analysis suggests that a decrease in the brokerage fee for buying and selling bonds will cause the demand for money to ________ and the demand for bonds to ________
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
Refer to the payoff matrix below. If Best Treats announces that it will introduce the new health snack, Healthy Snacks ________ believe Best Treats as their incentives ________ align.
Healthy Snacks and Best Treats are two firms competing in the health food snacks market. Both are considering introducing a new health food snack made purely of dried power fruits. The payoff matrix shows their net economic profit in millions for the different strategies.
A) should not; do
B) should; do
C) should not; do not
D) should; do not
Taxes cause deadweight losses because they prevent buyers and sellers from realizing some of the gains from trade
a. True b. False Indicate whether the statement is true or false