Those who favor a passive approach to policy believe that:
a. discretionary monetary policy can be used to help the economy since monetary policy lags are short
b. discretionary fiscal policy can be used to help the economy since fiscal policy lags are short.
c. lags associated with implementing policies are too long and unstable for discretionary policy to be effective.
d. despite the lags involved, implementing discretionary policy is preferable to inaction.
e. automatic stabilizers cannot be used to help the economy since monetary policy lags are short.
c
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Industrial production, total sales, nonfarm employment, and after-tax household income are examples of ________ indicators of economic activity.
A. coincident B. real C. preceding D. lagged
When the Fed raises the federal funds rate, eventually there is
A) an upward movement along the investment demand curve and the aggregate demand curve shifts leftward. B) an upward movement along the investment demand curve and the aggregate demand curve shifts rightward. C) a leftward shift of the investment demand curve and the aggregate demand curve shifts leftward. D) an upward movement along the investment demand curve and along the aggregate demand curve. E) a leftward shift of both the aggregate demand curve and the aggregate supply curve.
The demand curve for a monopolistically competitive firm is
A) the same as the industry demand curve. B) more elastic than the demand curve of the perfectly competitive firm. C) less elastic than the demand curve of the perfectly competitive firm. D) horizontal.
Jeff Kaufman decides to bank with Paris First National Bank (PFN). He opens a checking account by depositing $1,000 . According to the PFN balance sheet, after this initial $1,000 demand deposit, there are $1,000 in
a. reserves and $1,000 in demand deposits b. liabilities and $2,000 in demand deposits c. demand deposits and $0 in assets d. assets and $0 in liabilities e. reserves and $0 in liabilities