Fiscal policy during periods of relatively low unemployment and low inflation have
A) little effect due to time lags and the crowding-out effect.
B) significant effect due to the timely intervention of the president and congress.
C) significant effect because the changes in fiscal policy gives investors confidence in the economy.
D) little effect because the global market makes up fifty percent of aggregate spending.
A
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When tires are taxed and sellers of tires are required to pay the tax to the government,
A) the quantity of tires bought and sold in the market is reduced. B) the price paid by buyers of tires decreases. C) the demand for tires decreases. D) there is a movement downward and to the right along the demand curve for tires.
Monetary policy is considered time-inconsistent because
A) of the lag times associated with the implementation of monetary policy and its effect on the economy. B) policymakers are tempted to pursue discretionary policy that is more contractionary in the short run. C) policymakers are tempted to pursue discretionary policy that is more expansionary in the short run. D) of the lag times associated with the recognition of a potential economic problem and the implementation of monetary policy.