What three types of timing problems might policy makers experience when conducting discretionary fiscal policy?
Since it is difficult to forecast the economy, there is generally a lag between the time a policy change is needed and when that need is recognized by policy makers. Another lag is involved in instituting a policy change since Congress must act to change tax laws and expenditure programs. Finally, there is a lag between the time a policy is put into place and when the impact is felt on the economy. These three lags make it difficult to time fiscal policy in a countercyclical manner.
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The two largest sources of tax revenue for the U.S. federal government are
A. personal income taxes and payroll taxes. B. personal income taxes and corporate income taxes. C. payroll taxes and excise taxes. D. excise taxes and customs duties.
Some high-end retail stores that distribute mail-order catalogs will prominently offer some very high priced goods for sale (for example, a luxury sports car with gold-plated interior trim) in addition to their regular line of merchandise
Behavioral economists argue that the stores do not really plan to sell these goods, but they use these items to provide the customers with a high reference point for the prices of the other goods in the catalog. This practice is an example of: A) the ultimatim game. B) loss aversion. C) anchoring. D) none of the above
Product differentiation makes the demand for a monopolistically competitive firm's product:
a. perfectly elastic. b. more elastic than for a monopoly. c. more inelastic than for a monopoly. d. perfectly inelastic.
Which statement is false?
A. Germany pays higher manufacturing wage rates than the U.S. does. B. The United States pays the highest manufacturing wage rates in the world. C. Both Britain and Norway pay higher manufacturing wage rates than the United States. D. None of the statements are false.