The problem of lags suggests that monetary policy should
A) respond swiftly to statistical reports of economic conditions in the recent past.
B) respond to conditions expected to exist in the future.
C) stagger its implementation of policies so that there will be an ongoing effect on the economy.
D) not respond to changing economic conditions in the economy but instead rely on the economy's
self correcting mechanism.
Ans: B) respond to conditions expected to exist in the future.
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Farmer Fanny sells her crops in a perfectly competitive market. If she produces 500 bushels for total revenue of $3,000 and if harvesting the 501st bushel would raise her total cost from $2,500 to $2,510, her
a. revenue will increase by $4 if she harvests the 501st bushel b. revenue will fall by $4 if she harvests the 501st bushel c. average fixed cost will rise if she harvests the 501st bushel d. profit will fall by $10 if she harvests the 501st bushel e. profit will fall by $4 if she harvests the 501st bushel
What is the interest rate on a 12-month U.K. certificate of deposit if the dollar return on the certificate is 4 percent and the dollar has appreciated 9 percent against the British pound?
a. 15 percent b. 13 percent c. 9 percent d. 5 percent e. 4 percent
Which of the following will cause a reduction in output per worker (Y/N)?
A) a reduction in the capital stock (K) B) a reduction in the saving rate C) a reduction in K/N D) all of the above
A ______ good is something whose consumption by one person does not prevent its consumption by other people.
Fill in the blank(s) with the appropriate word(s).