Refer to the information provided in Figure 29.1 below to answer the question(s) that follow.
Figure 29.1Refer to Figure 29.1. If policy makers take an action at time t2, the impact on the economy will not be at time t2 because
A. of the response lag.
B. economic policies are ineffective.
C. of the recognition lag.
D. of the implementation lag.
Answer: A
You might also like to view...
If real GDP grows by 3 percent, the velocity of circulation does not change, and the quantity of money grows by 5 percent, then in the long run the inflation rate is
A) 8 percent. B) -5 percent. C) 2 percent. D) 3 percent. E) -2 percent.
The process in which people seeking higher yielding securities take their funds out of the banking system thus restricting the amount of funds banks can lend is called
A) capital mobility. B) loophole mining. C) disintermediation. D) deposit jumping.
If all we know is that the opportunity cost of a car equals 100 refrigerators in France, and 200 refrigerators in Italy, we can conclude
a. nothing about which nation has the absolute advantage in refrigerator production b. that France has a comparative advantage in refrigerator production c. that mutually beneficial international trade might involve the market exchange of 1 car for 80 refrigerators (whereby France would gain more than Italy) d. that mutually beneficial international trade might involve the market exchange of 1 car for 300 refrigerators (whereby Italy would gain more than France) e. that France has the absolute advantage in car production
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.