Economists often focus on average behavior because it is easier to predict

The recognition time lag recognizes that it takes time

A) to collect information about the state of the economy. B) for any change in policy to take effect and for people to recognize that the policies are effective. C) to get politicians to agree on the best policy to enact. D) for the politicians to enact the policy once the need for change has been recognized.

Which of the following is a likely consequence of a fall in private investment?

A) Mortgage defaults fall. B) Asset prices rise. C) Labor supply falls. D) Consumption falls.