A transmission lag:
What will be an ideal response?
These legal changes take time to show up in actual tax forms and
government budgets. One solution is that changes can be made retroactive to speed up their implementation—for instance, a tax cut legislated now may apply to income received during the previous year. However, this is not always done.
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In the Great Depression, the financial sector collapsed, as
A) banks engaged in ruinous competition. B) the stock market boomed, so people withdrew most of their funds from banks and invested heavily in stocks. C) the bond market boomed, so people withdrew most of their funds from banks and invested heavily in bonds. D) many banks closed.
The equation Y = f(P - Pe) represents the
A. income velocity of money. B. Lucas supply function. C. Keynesian consumption function. D. equation of exchange.