Refer to the information provided in Figure 29.1 below to answer the question(s) that follow.
Figure 29.1Refer to Figure 29.1. If policy makers decide on a policy at point t3 but it does not affect the economy until period t6, then the policy choice is likely to be
A. automatically stabilizing.
B. optimal.
C. destabilizing.
D. stabilizing.
Answer: C
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Suppose the full-employment equilibrium real wage rate is $11 per hour while the actual real wage rate is $12 per hour. If the actual real wage rate does not change, then
A) job rationing will decrease. B) the production function will shift downward. C) job search will decline. D) job rationing will occur. E) a positive Okun Gap will occur.
________ inflation is more stable than __________ inflation, because it ____________.
A. Core; headline; excludes food and gasoline prices B. Headline; core; excludes food and gasoline prices C. Core; headline; does not exclude food and gasoline prices D. Headline; core; does not exclude food and gasoline prices
Changes in the expected future price level:
a. Shifts the short run aggregate supply curve upward b. Shift the long run aggregate supply curve to the right. c. Shift short run aggregate supply curves upward and long run aggregate supply curves to the right. d. Do none of the above
Considering changes to the monetary base, are discount loans and federal funds borrowing equivalent? Explain.
What will be an ideal response?