Which of the following is the most powerful argument for putting restraints on policy makers (as opposed to self-restraint by policy makers themselves)?
A) time inconsistency
B) uncertainty about Okun's coefficient
C) uncertainty about the natural rate of unemployment
D) uncertainty about the timing of policy impacts
E) disagreements about the proper structure of an econometric model
A
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A government program that attempts to stimulate domestic production of a good in which the country has a natural comparative advantage because of its domestic resources is an example of a(n) ________ policy
A) primary-export-led B) import-substitution development C) outward-looking development D) linkage-effect
Figure 10-7
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In Figure 10-7, through which point must a horizontal demand curve pass to yield a long-run equilibrium?
A. A B. B C. C D. All of these are correct.
Within the Keynesian aggregate expenditures model, if the economy is below equilibrium, then there will be:
a. an increase the demand for goods and services. b. an increase in real GDP. c. lower interest rates, which will stimulate aggregate demand and keep the economy at full employment. d. a lower price level, which will quickly guide the economy to full-employment equilibrium.
The market price for wallets is $20 . Your technology is such that at your most efficient production point, the average total cost of producing a wallet is $2.50 . Your manager runs into your office and shouts, "Boss! Average costs are rising! Average costs are rising!" To make a profit-maximizing decision, you should
a. definitely decrease production b. immediately stop production c. completely ignore your manager d. ask the manager about the marginal cost e. ask the manager about the average total cost