Economists estimate that the total lag for monetary policy is about:
a. 1-2 days. b. 2 weeks to 1 month.
c. 3-12 months. d. 2-4 years.
c
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If there is no Ricardo-Barro effect, an increase in the government budget deficit
A) lowers the equilibrium real interest rate. B) decreases the demand for loanable funds. C) increases the supply of loanable funds. D) decreases the supply of loanable funds. E) raises the equilibrium real interest rate.
The snob effect corresponds best to a
A) negative network externality. B) Giffen good. C) positive network externality. D) bandwagon effect.
Why specialize?
A) because assigning each worker a variety of tasks makes her more productive B) It usually increases productivity. C) to decrease our dependence on each other D) There is no economic rationale for specialization.
The time inconsistency of policy implies that
a. what policymakers say they will do is generally what they will do, but people don't believe them because of current policy. b. when people expect that inflation will be low, it is harder for the Fed to increase output by increasing the money supply. c. people will believe Fed policy will be more inflationary than the Fed claims. d. what policymakers say they will do is usually not what they do, but people believe them anyway.