Lags in the approval and implementation of fiscal policy:
a. weaken fiscal policy as a tool of economic stabilization
b. increase the effectiveness of fiscal policy as a tool of economic stabilization.
c. help legislators better assess what policies are most appropriate to adopt.
d. make fiscal policy more responsive to the current economic environment.
e. cause fiscal policy to be more effective at changing the level of real GDP than changing the price level only in the long run.
a
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If, in the market for money, the quantity of money demanded exceeds the money supply, the interest rate will
A. fall, causing households and businesses to hold more money. B. rise, causing households and businesses to hold more money. C. fall, causing households and businesses to hold less money. D. rise, causing households and businesses to hold less money.
Which of the following would most likely induce the Federal Reserve to conduct expansionary monetary policy? A significant decrease in
A) business taxes. B) oil prices. C) investment spending. D) income tax rates.
The assumed goal of the firms that operate in each of the four market structures discussed in the text is to maximize:
A) sales. B) revenue. C) profits. D) price.
Explain and give examples of other forms of barriers to free trade besides tariffs and quotas