Suppose policy makers are concerned about a shortage of long-term capital investment. To remedy the problem, various plans to cut capital gains taxes have been suggested. The delay in picking a plan is called the _____
a. implementation lag
b. policy coordination problem
c. decision-making lag
d. recognition lag
e. effectiveness lag
c
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The concept of adverse selection helps to explain all of the following EXCEPT
A) why firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets. B) why indirect finance is more important than direct finance as a source of business finance. C) why direct finance is more important than indirect finance as a source of business finance. D) why the financial system is so heavily regulated.
In the two-sector growth models, endogenous growth arises from
A) increased saving. B) the research sector. C) increased capital. D) the manufacturing sector.
If you were a rational expectations economist, you would argue that the goal for economic policy is to
a. discover the NAIRU and make sure the actual rate of unemployment doesn't fallbelow it b. discover a way to lower unemployment to two percent without inflation c. keep the inflation rate below 10 percent d. maintain inflation at 3 percent and unemployment at 4 percent e. maintain unemployment at 3 percent and inflation at 4 percent
Money is:
A. controlled by the supply and demand of goods and services on which our money is spent. B. represented only by the amount of dollars and coins in our economy. C. the set of all assets that are regularly used to directly purchase goods and services. D. anything that we use to buy goods and services as long as it is not a good itself.