The lag problem associated with monetary policy is due mostly to
a. the fact that business firms make investment plans far in advance.
b. the political system of checks and balances that slows down the process of determining monetary policy.
c. the time it takes for changes in government spending to affect the interest rate.
d. All of the above are correct.
a
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A gallon of milk costs $4 in Bonland. If the government fixes the price at $3.50, ________
A) the quantity demanded of milk will fall B) the quantity of milk supplied will increase C) a shortage of milk will occur in the market D) there will be an excess supply of milk in the market
Suppose that in the short run firms are making economic profit in a monopolistically competitive industry. Explain what will eventually happen in the long run
In your answer make sure to discuss demand, price and the relationship between price and average total cost.