Which of the following describes the decision-making lag associated with activist policy?
a. The time needed to identify a macroeconomic problem and assess its seriousness
b. The time needed to decide what to do once a macroeconomic problem has been identified
c. The time needed to introduce a change in monetary or fiscal policy
d. The time necessary for changes in monetary or fiscal policy to have an effect on the economy
b
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The above table gives Sue's marginal utility schedules for sub sandwiches and Mountain Dew, the only products Sue consumes. Suppose the price of a sub sandwich is $4 each and the price of a Mountain Dew is $2 each. Sue's income is $12
If Sue is at a consumer equilibrium, she eats ________ sub sandwich(es) and drinks ________ Mountain Dews. A) 0; 6 B) 1; 4 C) 2; 2 D) 3; 0
Forecasts based on the extrapolation of observed trends and relationships are likely to be accurate, if ________
A) changes in expectations are properly considered B) policy actions are anticipated C) economic behavior is guided by rational expectations D) policy changes are understood to be permanent
Explain the concept of diminishing marginal utility, and describe the role that it plays in the utilitarian argument for the redistribution of income
If supply increases and the price doesn't change, there will be
A. a surplus. B. neither a shortage nor a surplus. C. both a shortage and a surplus. D. a shortage.