Refer to the following model.
yt = 
0 + 
0st + 1st-1 + 2st-2 + 3st-3 + ut
0+ 1+ 2+ 3 represents:
A. the short-run change in y given a temporary increase in s.
B. the short-run change in y given a permanent increase in s.
C. the long-run change in y given a permanent increase in s.
D. the long-run change in y given a temporary increase in s.
Answer: C
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A) the beginning of a cyclical movement and its recognition. B) the decision that compensatory action should be taken and the enactment of tax or expenditure changes. C) the increase or decrease in net government receipts and their final effects on total spending. D) all of the above, because a significant miscalculation with respect to any of these lags could increase aggregate instability.
During the delivery period,
A) the futures price exceeds the price in the cash market. B) the price in the cash market exceeds the futures price. C) the futures price and the price in the cash market are equal. D) there is no discernible relationship between the futures price and the price in the cash market.
When the federal government installs a price support program that requires the government to purchase all of a good not bought in the private economy at the support price, changes in producer surplus
A) are negative. B) are positive, but more than offset by the cost to consumers and the government. C) are positive, and not offset by the cost to consumers and the government. D) and consumer surplus are both positive.