Monetary policy affects the economy with a long lag, in part because
a. proposals to change monetary policy must go through both the House and Senate before being sent to the president.
b. monetary policy works through changes in interest rates, and the Fed does not have the ability to change interest rates quickly.
c. changes in interest rates primarily influence consumption spending, and households make consumption plans far in advance.
d. changes in interest rates primarily influence investment spending, and firms make investment plans far in advance.
d
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If a country increases its savings rate, the steady-state equilibrium level of:
A) GDP will increase. B) investment will decrease. C) capital stock will decrease. D) efficiency units of labor will increase. Consider two economies: A and B. Both the countries have access to the same aggregate production function and have the same population and same efficiency units of labor, but have different saving rates. The savings rate is higher in country A in comparison to country B.
Describe the changes in the variables that will cause the demand for a product to decrease, shifting the demand curve to the left
What will be an ideal response?
Assuming a real interest rate of four percent, which of these causes the largest increase in the present value of lifetime resources?
A) a winning lottery ticket that pays $9,600 today B) an additional $10,000 of income in the future period C) a salary increase of $5,000 both today and in the future period D) an additional $10,000 of current wealth
An increase in the value of the dollar in international exchange rate markets will cause the relative price of U.S. produced goods to foreigners to rise, the relative price of foreign produced goods to Americans to fall, causing U.S. exports to fall and U.S. imports to rise
a. True b. False Indicate whether the statement is true or false