Explain the three lags that make it difficult to time changes in discretionary policy properly
The recognition lag is the period between when economic conditions have changed and when policy makers recognize the change. The administrative lag is the time between when the need for policy is recognized and when the policy change is implemented. The impact lag is the time between the implementation of a policy change and when the change actually exerts its primary impact on the economy.
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If you gave your friend a gift of a corporate bond, such as a $100 General Motors bond, your friend would have a gift of
a. M1 money b. M2 and fiat money c. specie d. near money e. not money
Caroline is an artist. She purchases canvases, paints, brushes, and accessories for $75. She sells one of her original paintings to an art gallery for $1,500, which, in turn, sells it to an art lover for $4,500. How much market value does the gallery add?
A) $1,425 B) $1,500 C) $3,000 D) $4,500