The Clinton Administration, faced with eight years of uninterrupted prosperity was chronically worried about inflation and thought of applying countercyclical fiscal policy but was nervous about doing so because
a. it was politically incorrect to raise taxes
b. it was politically incorrect to cut government spending
c. countercyclical policy had never worked before
d. it didn't know where the economy would be in six months and was afraid that the countercyclical policy they would introduce would be an inappropriate one
e. there was no administrative lag that it can use to implement the policy
D
You might also like to view...
The above figure shows the marginal social benefit and marginal social cost curves of chocolate in the nation of Kaffenia. When the marginal social benefit is equal to the marginal social cost of chocolate in Kaffenia
A) either 100 pounds or 250 pounds can be produced each day. B) no chocolate is produced. C) 150 pounds will be produced each day. D) any quantity up to 150 pounds will be efficient.
The increase in total revenue due to increasing the amount of labor employed by one unit is called the
A) Marginal Product. B) Marginal Revenue Product. C) Average Revenue Product. D) Total Revenue Product.
In the simultaneous move labor negotiation game:
a. Neither party prefers bargaining hard in the Nash equilibrium b. Both the parties want to end up in the least efficient outcome c. Both parties bargain hard in the Nash equilibrium d. Both parties want to stay in the prisoner's dilemma
Use the sticky-wage theory of aggregate demand to explain the short-run Phillips curve