A policy reaction function describes how the action a policymaker takes depends on:
A. the political affiliation of the policymaker.
B. the state of the economy.
C. the reaction of special interest groups.
D. public approval ratings.
Answer: B
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Refer to Figure 13-1. Ceteris paribus, a decrease in the growth rate of domestic GDP relative to the growth rate of foreign GDP would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
Social Security _____
a. reduces the incentive to save b. increases the incentive to save c. has no effect on saving d. increases the incentive to save when population growth is falling and decreases the incentive to save when population growth is falling
The law of supply implies that the supply curve is
A) flat. B) upward sloping. C) downward sloping. D) vertical.
The OLS estimator is derived by
A) connecting the Yi corresponding to the lowest Xi observation with the Yi corresponding to the highest Xi observation. B) making sure that the standard error of the regression equals the standard error of the slope estimator. C) minimizing the sum of absolute residuals. D) minimizing the sum of squared residuals.