From the Keynesian perspective, an exogenous increase in investment is likely to lead to
A) a decrease in interest rates.
B) an increase in output.
C) an increase in the money supply.
D) a decrease in government spending.
B
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One timing problem in using fiscal policy to counter a recession is the "administrative lag" that occurs between the:
A. Start of the recession and the time it takes to recognize that the recession has started B. Start of a predicted recession and the actual start of the recession C. Time fiscal action is taken and the time that the action has its effect on the economy D. Time the need for the fiscal action is recognized and the time that the action is taken
If people take into account the expected behavior of fiscal and monetary authorities in forecasting the behavior of inflation rates, they are most likely forming their projections using
A. adaptive expectations. B. contractionary expectations. C. inflationary expectations. D. rational expectations.