How do advocates of discretionary stabilization policy view frequent changes in spending and tax policy?
a. The changes make the economy more difficult to forecast.
b. The changes make life more difficult and hectic for Congress and the Fed.
c. The changes smooth out the business cycle, making planning easier.
d. The changes cause more instability in the economy and make planning more difficult.
c
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Which Fed policy would be part of an expansionary monetary policy?
A) Buying government bonds. B) Raising the discount rate. C) Both of the above. D) None of the above.
GDP is an imperfect measure of well-being because
a. it does not measure standards of living. b. it does not include household production. c. it ignores many of the costs of production. d. it excludes many goods produced within markets. e. both b and c.
The Granger Causality Test
A) uses the F-statistic to test the hypothesis that certain regressors have no predictive content for the dependent variable beyond that contained in the other regressors. B) establishes the direction of causality (as used in common parlance) between X and Y in addition to correlation. C) is a rather complicated test for statistical independence. D) is a special case of the Augmented Dickey-Fuller test.
Which of the following is an assumption of the monopoly model?
a. There exists a large number of buyers and sellers. b. There are no close substitutes of the good. c. The firm faces a horizontal demand curve. d. There is free entry and exit of firms. e. The firm is a price taker.