The difference between an inside lag and an outside lag is best described as:
A. an inside lag is the time needed for monetary policy to be effective while an outside lag is the time needed for fiscal policy to be effective.
B. an inside lag is usually much longer than an outside lag.
C. an inside lag is the time between when a policy change is needed and when the Fed identifies the problem and solution, while an outside lag is the time between a policy decision and its effect on the economy.
D. an outside lag is the time between when a policy change is needed and when the Fed identifies the problem and solution, while an inside lag is the time between a policy decision and its effect on the economy.
Answer: C
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Any policy that seeks to influence the level of aggregate demand is called
A) productivity policy. B) stabilization policy. C) aggregate policy. D) employment policy.
The currency of the United States is
a. backed dollar for dollar by gold b. backed dollar for dollar by GDP (that is, by goods) c. not backed by anything (neither gold nor fool's gold) d. backed by the government's currency reserves in the vaults at Fort Knox e. backed by gold only for coin, not for paper bills