If the time for an economy to self-correct is shorter than the active policy lags, then:
a. active policy should be strengthened
b. active policy is likely to destabilize the economy.
c. time is required to accumulate evidence that the economy is performing below its potential.
d. the aggregate demand curve shifts more rapidly than the short-run aggregate supply curve.
e. active policy will work better than passive policy.
b
You might also like to view...
Farmer Brown produces corn in a perfectly competitive market. Farmer Brown produces and sells 500 bushels of corn. The market supply and demand curves are illustrated in the above figure
a. What is Farmer Brown's total revenue? b. What is Farmer Brown's marginal revenue?
In the long run,
a. at least one of the firm's inputs is fixed b. customer tastes and preferences are fixed c. the firm may vary all inputs d. sunk costs become variable costs e. government intervention is inevitable
Whenever a person gets paid more than the minimum she would be willing to accept, we call that excess over the minimum _________.
Fill in the blank(s) with the appropriate word(s).
There has been much discussion over whether marijuana should be legalized. Assume that if it becomes legal the price will be cut in half. Given your text estimate of -1.0 price elasticity for marijuana, what would you expect to be the change in marijuana usage?
A. It will double. B. It will not change. C. It will be cut in half. D. It will increase by 50%.