During normal times
A) fiscal policy is very effective because it the effects of fiscal policy will swamp automatic stabilizers and time lags can be.
B) fiscal policy can immediately correct problems in the economy.
C) the Ricardian equivalence theorem makes fiscal policy very effective.
D) fiscal policy is not effective because of the recognition time lag.
Ans: D) fiscal policy is not effective because of the recognition time lag.
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Soda and peanuts are complements. Other influences on buying plans remaining the same, a rise in the price of soda
A) increases the demand for peanuts. B) decreases the demand for peanuts. C) decreases the demand for soda. D) increases the demand for soda. E) has no effect on the demand for peanuts, though it does change the quantity demanded of peanuts.
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