Long time lags hamper the effectiveness of economic policy because:
a. people don't want to wait for economic recovery
b. the longer unemployment lasts, the more intense inflation becomes.
c. by the time the impact of a policy is felt, a new problem may have come along that requires a different policy, which may make the economic situation even worse.
d. if inflation is allowed to continue for too long, it becomes immune to policy interference.
e. if unemployment is allowed to continue for too long, it becomes immune to policy interference.
c
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Tastes for perfect substitutes are both homothetic and quasilinear.
Answer the following statement true (T) or false (F)
The main input into the production of Starbuck's coffee is imported coffee beans. If the dollar depreciates, how will this affect the U.S. retail coffee market?
a. Input prices will fall and supply will decrease. b. Input prices will fall and supply will increase. c. Input prices will rise and supply will decrease. d. Input prices will rise and supply will increase.
In moving along a demand curve, everything is held constant except buyers' income
Indicate whether the statement is true or false
A bank with a leverage ratio of 9 to 1 has
A) $9 in assets for every $1 in liabilities. B) $9 in assets for every $1 in capital. C) $1 in assets for every $9 in capital. D) $1 in assets for every $9 in liabilities.