Is there any way to conduct fiscal policy and avoid the lags involved with discretionary policy?
Programs that act as automatic stabilizers tend to boost aggregate demand during recessions and restrict aggregate demand during inflationary periods. Examples of automatic stabilizers include the unemployment compensation system, the corporate profits tax, and the progressive income tax. These programs act countercyclically without requiring legislative action, and therefore, they avoid some of the lags usually associated with discretionary policy.
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One reason China has been able to grow so rapidly even though its financial development is still in its early stages is
A) the high savings rate of around 40%. B) the shift of labor to the agricultural sector. C) the stringent enforcement of financial contracts. D) the ease of obtaining high-quality information about creditors.
If variable cost rises from $60 to $100 as output increases from 15 to 20 units, the marginal cost of the twentieth unit
a. is $100 b. is $5 c. is $40 d. is $8 e. cannot be determined without total cost
Under a floating exchange-rate regime with a low degree of capital mobility, if the domestic government uses an expansionary fiscal policy
A. the financial account balance deteriorates. B. the official settlements balance tends to go into surplus. C. foreign capital outflows decrease domestic product. D. the domestic interest rate increases.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The best point for society would be
A. either Point B or Point C, as the total amount being produced at either of these points is approximately the same. B. at any of the labeled points, as all of the points represent an efficient allocation of resources. C. Point C, as at this point there are approximately equal amounts of LCD and OLED televisions being produced. D. indeterminate from this information, as we don't have any information about the society's desires.