Which statement is a good argument in support of policy activism?
A) Policy lags are generally longer than the time it takes the self-correcting mechanism to work.
B) Activist policies help to ensure stability of the real interest rate.
C) Well-considered policies can assist the economy's self-correcting mechanism, thus reducing the variability of inflation and unemployment.
D) all of the above
E) none of the above
C
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When is demand said to be inelastic?
a) if the quantity demanded changes only slightly when the price of the good changes b) if demand shifts only slightly when the price of the good changes c) if buyers respond substantially to changes in the price of the good d) if the price of the good responds only slightly to changes in demand
When comparing the velocity of M2 (V2), with the velocity of M1 (V1), the evidence suggests that V2 has been __________ and V1 has been __________ over time
A) relatively predictable; relatively predictable B) relatively predictable; relatively unpredictable C) relatively unpredictable; relatively predictable D) relatively unpredictable; relatively unpredictable