The Federal Reserve Board meets roughly every 6 weeks to determine broad economic policy. It does not have to deal with the political process, which is a reason the _____ lag is shorter for monetary policy than it is for fiscal policy.

If no fiscal policy changes are made, suppose the current aggregate demand curve will increase horizontally by $1,000 billion and cause inflation. If the marginal propensity to consume is 0.75, federal policymakers could follow Keynesian economics and restrain inflation by decreasing:

a. government spending by $250 billion. b. taxes by $100 billion. c. taxes by $1,000 billion. d. government spending by $1,000 billion.

If the minimum wage is set above the equilibrium wage, then

A) more people will work than at the equilibrium wage. B) the same number of people will work as at the equilibrium wage. C) fewer people will want to work than at the equilibrium wage. D) there will be fewer labor hours purchased by employers than at the equilibrium wage. E) none of the above