Some economists argue that policymakers can use monetary and fiscal policy to reduce the severity of economic fluctuations. In practice, however, there are obstacles to the use of such policies. What are the primary difficulties with using monetary and fiscal policy to stabilize the economy?
Both monetary and fiscal policy work with a long lag. In order to stabilize the economy, policymakers need to look ahead to see the economic conditions that will prevail when their policy actions take effect. Unfortunately, economic forecasting is imprecise, making it difficult to match up policy actions with economic conditions.
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According to this Application, a study of municipalities in Latin and South America found that a one degree Celsius rise in temperature was associated with
A) no measurable change in per capita income. B) a decline in municipal per capita income. C) a small decline in real income and a small increase in per capita real income. D) a slight increase in municipal per capita income.
Explain the connection between opportunity cost and the PPF
What will be an ideal response?
A balance of payments deficit is associated with a ________ of international reserves, while a balance of payments surplus is associated with a ________
A) loss; loss B) loss; gain C) gain; loss D) gain; gain
If there are only two goods and these are consumed in fixed proportions, the price elasticities of demand for these two goods will sum to
a. 0.0 b. -0.5 c. -1.0 d. a number between 0 and -1.