The delay between the time at which a problem is recognized and the time at which a policy to deal with it is enacted is called

A tax on a product causes a deadweight loss because: a. some consumer surplus is transferred from buyers to producers

b. some producer surplus is transferred from producers to consumers. c. some consumer and producer surplus is transferred to the government. d. it distorts the incentives of producers and consumers so that the efficient level of output is not produced.

When the Fed buys government bonds, the reserves of the banking system

a. increase, so the money supply increases. b. increase, so the money supply decreases. c. decrease, so the money supply increases. d. decrease, so the money supply decreases.