One of the main difficulties with implementing fiscal policy is:
A. deciding on a policy without all the relevant information.
B. the time lag between the time the policy is chosen and the time it gets enacted.
C. the danger in overshooting or undershooting the goal of full employment.
D. All of these are true.
Answer: D
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Using the Rule of 70, if China's current growth rate of real GDP per person was 7 percent a year, how long would it take the country's real GDP per person to double?
A) 35 years B) 14 years C) 10 years D) 49 years
Income tax collections:
a. rise during a recession, thus reduce the severity of the recession. b. rise during a recession, thus increase the severity of the recession. c. fall during inflationary episodes, thus increase the severity of the inflation. d. fall during a recession, thus reducing the severity of the recession.
It is not clear if a consumption tax will lead to significantly more saving because:
A. Buisnesses will not demand addition investments so rates will be low. B. It is not clear wheather the typical household will adjust consumption in favor of more savings. C. House holds will not understand there is an incenetive to save.
Recall the Application about craft beer and the increase in the price of hops to answer the following question(s).Recall the Application. Because hops are inputs in the production of beer, an increase in the production of beer resulted in:
A. an increase in the demand for hops. B. a decrease in the demand for hops. C. an increase in the quantity demanded for hops. D. a decrease in the quantity demanded for hops.