When there is an interval between when the fiscal policy changes and corresponding changes in aggregate spending, we have a(n)
A. aggregate time lag.
B. action time lag.
C. recognition time lag.
D. effect time lag.
Answer: D
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In the market for yen, an increase in U.S. real interest rates tends to
A. decrease demand. B. increase equilibrium price. C. increase excess demand. D. cause no change in equilibrium price.
There is a surplus in a market for a product when:
a. The increase in demand is greater than the decrease in supply b. Quantity supplied is less than quantity demanded c. Quantity demanded is less than quantity supplied d. The decrease in supply is greater than the increase in demand
A fiscal policy that increases government spending or cuts taxes is most appropriate when the economy is in:
A. a recessionary gap. B. a long-run equilibrium C. a short-run equilibrium. D. an inflationary gap.
The largest liability item in the Federal Reserve Banks' consolidated balance sheet (as illustrated in the book, for April 2013) is:
A. Treasury deposits B. Federal Reserve Notes C. Reserves of commercial banks D. Loans to commercial banks