Assume it takes the Fed 4 months to understand that a demand shock has occurred in the economy, and another 1 month to adjust policy to the shock
The initial 4 month time period refers to the ________, and the following one month time period refers to the ________. A) impact lag; implementation lag
B) recognition lag; implementation lag
C) implementation lag; policy lag
D) policy lag; impact lag
B
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In an "underground economy," the production of goods and services
A) is usually too insignificant to be included in GDP. B) is not measured but is included in GDP. C) is measured and included in GDP. D) is not measured or included in GDP.
The goodness of the fit of a line is measured by the
A) R2 statistic. B) t-statistic. C) unbiased coefficient. D) standard error.
Firms with market power offer a differentiated product in order to
a. follow the trends b. increase market power c. support its contractors in low-wage countries d. fill up costly warehouses e. All of the answers are correct.
Differentiate between rational expectation and adaptive expectation using suitable examples