Which of the following statements is true?
A) Unlike monetary policy, fiscal policy is not subject to lags.
B) Like monetary policy, fiscal policy is also subject to the same types of lags.
C) In general, fiscal policy lags are much shorter than monetary policy lags.
D) Although both monetary and fiscal policies are subject to lags, fiscal policy lags are easier to eliminate.
Ans: B) Like monetary policy, fiscal policy is also subject to the same types of lags.
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Suppose an economy's entire output is cars. In Year 1, all manufacturers produce cars at $15,000 each; the real GDP is $300,000. In Year 2, 20 cars are produced at $16,000 each. What is the real GDP in Year 2?
(A) $280,000 (B) $20,000 (C) $320,000 (D) $300,000
Between 1961-2011 about How much did Canadian real GDP per capita change per year?
What will be an ideal response?
Why might a country like Brazil have to offer a much higher interest rate on its government bonds than those offered by the Great Britain?
What will be an ideal response?
In the early 1970s monetary growth was relatively stable yet unemployment and prices were quite unstable. This suggests that
A) policy activism is superior to policy rules. B) government spending must have been destabilizing. C) monetary rules will not iron out every short-run fluctuation resulting from shocks. D) the government was following a monetary rule.