In the long run, does it matter whether a policy action was anticipated or not?
What will be an ideal response?
In the long run, output is potential output. The response to an anticipated policy action comes sooner, but is ultimately no different than the delayed response to a "recognized" policy. Nonetheless, it does matter whether or not the policy had been anticipated, because anticipated policies are less destabilizing to output.
Economics
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If the nominal money supply grows 6%, real income rises 2%, and the inflation rate is 5%, then the income elasticity of money demand is
A) 0.5. B) 0.75. C) 1.0. D) 1.5.
Economics
Given the values in the table above, if the real interest rate rises from 5 to 6, the change in household saving is ________
A) negative 0.5 B) negative 1.55 C) negative 0.45 D) 1.55 E) none of the above
Economics