What are the two basic reasons inside lags occur?
What will be an ideal response?
Inside lags occur because it takes time for policy makers to identify and recognize a problem in the economy, and once the problem has been recognized it takes more time for policy makers to take corrective actions.
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The increase in government spending on unemployment insurance payments to workers who lost their jobs during a recession and the decrease in government spending on unemployment insurance payments to workers during an expansion are examples of
A) discretionary fiscal policy. B) discretionary monetary policy. C) automatic stabilizers. D) automatic monetary policy.
Which of the following does NOT shift the demand curve for broccoli?
A) an increase in the cost of fertilizer used to grow broccoli B) a warning by the U.S. Surgeon General that broccoli causes schizophrenia C) an increase in the price of spinach, a substitute for broccoli, because rodents gobbled up much of this year's spinach crop D) a decrease in the price of spinach, a substitute for broccoli, because of a bumper crop of spinach this year
Which of the following reasons explains why rich countries persistently restrict textile imports from poor countries?
A) The trade restrictions make textile consumers better off. B) The trade restrictions make workers in poor countries better off. C) The trade restrictions benefit an organized visible special interest in rich countries. D) Rich countries have a strong need for the revenue from these trade restrictions.
Explain how changes in relative income affect the value of a nation’s currency.
What will be an ideal response?