Cash payments to a steel mill for steel used in production would be an example of:

Many borrowers defaulted on subprime mortgages ultimately disrupting financial markets by August 2007. Which of the following is a likely result of this increase in financial frictions?

A) The AD curve likely shifted left which caused a positive inflation gap. B) The AD curve likely shifted right which caused a positive inflation gap. C) The AD curve likely shifted left which caused an upward movement along the MP curve to a higher general equilibrium interest rate. D) The AD curve likely did not shift. E) none of the above

The implementation lag is _____ for fiscal than for monetary policy; the lag before the effects of monetary policy on real output and unemployment is ____ than for its effects on real output and unemployment:

a. Longer, long and variable b. Longer; relatively short and predictable c. Shorter; long and variable d. Shorter; relatively short and predictable