One timing problem in using fiscal policy to counter a recession is the "legislative lag" that occurs between the
A. time the need for the fiscal action is recognized and the time that the action is taken.
B. time fiscal action is taken and the time that the action has its effect on the economy.
C. start of the recession and the time it takes to recognize that the recession has started.
D. start of a predicted recession and the actual start of the recession.
Answer: A
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If there is a large increase in the price of oil and the Fed wishes to maintain stable output, which of the following should it do?
a. Do nothing, because the self-correcting mechanism will adjust the economy b. Sell bonds in the open market c. Wait, because output seldom changes when there is an increase in the price of oil d. Encourage firms to not adjust the wages they pay e. Buy bonds in the open market
Suppose that florists and landscape workers are not unionized. If florists unionize, then the wages of
a. florists will rise, and the wages of landscape workers will fall. b. florists will fall, and the wages of landscape workers will rise. c. both florists and landscape workers will rise. d. both florists and landscape workers will fall.
Who from among the following is counted as employed?
A. Frank would like to work, but has not looked for work because he believes no jobs are available. B. Ray wants to work forty hours per week, but can only find work for twenty hours per week. C. Martin has been offered several jobs in the past four weeks, but has chosen not to accept any of the offers. D. Anna Marie spends all of her time taking care of her children at home.
A market where individual firms cannot affect the market price of their good is most likely:
A. a monopoly B. an oligopoly C. a monopolistically competitive market. D. perfectly competitive