Consider an economic policy regime in which rules are well-known but frequently ignored. Which of these statements is true?
A) This regime might work in the long-run, but is unlikely to produce good outcomes in the short run.
B) Policymakers in this regime might find that rules are being broken with increasing frequency.
C) This regime is more likely to be supported by nonactivist, than by activist policymakers.
D) This regime is more likely to result in high unemployment than in high inflation.
E) This regime is unlikely to produce large government budget deficits.
B
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The sample average of the OLS residuals is
A) some positive number since OLS uses squares. B) zero. C) unobservable since the population regression function is unknown. D) dependent on whether the explanatory variable is mostly positive or negative.
If total deposits at Last Bank and Trust are $100 million, total loans are $70 million, and excess reserves are $20 million, then which of the following is the required reserve ratio?
a. 70 percent. b. 30 percent. c. 20 percent. d. 10 percent.