An advantage of macroeconomic policy based on pre-specified rules might be that ________
A) it is easier to stick to long-run considerations and avoid bad long-run outcomes
B) it is more flexible than discretionary policy
C) it is easier to adapt to short-run changes and avoid a bad short-run outcome
D) all of the above
E) none of the above
A
Economics
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One explanation for the sharp decline in inventory investment during the 2007-2009 financial crisis was ________
A) financing constraints B) the rise in the level of income C) the volatility of interest rates D) the increase in total spending and therefore costs
Economics
If the marginal propensity to save is equal to 0.5 in the simple Keynesian model, then a 10-unit increase in government spending will cause output to rise by
a. 5 units. b. 10 units. c. 20 units. d. 25 units. e. 40 units.
Economics