What causes a shorter response lag in fiscal policy?
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an increase in gov't spending
According to the rational expectation hypothesis, disequilibrium may exist in the labor
market because?
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of unpredictable shocks.
when are Fiscal policies less effective?
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when the exchange rate is flexible and the economy is open
implementation lags
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the time is takes to put the desired policy into effect once economists and
policy makers recognize that the economy is in a boom or a slump
Diminishing returns in productivity
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In the absence of increase in the capital stock, as labor increase, less and
less output will be added by each new worker
Life-cycle theory of consumption
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a theory of household consumption: Households make lifetime
consumption decisions based on their expectations of lifetime income
, Determine if the statement below is true or false:
If Japan imposes a subsidy on car exports to the US, the price of cars in the US is likely
to increase
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False
The Lucas supply function, in combination with the assumption that expectations are
rational, implies that
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anticipated policy changes have no effect on real output
The main goal of stabilization is?
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use monetary and fiscal policy to smooth out fluctuations in output,
employment, and prices.
what occurs because of operation of the economy, or the time it takes for the
multiplier to reach its full value?
Give this one a try later!
Give this one a try later!
an increase in gov't spending
According to the rational expectation hypothesis, disequilibrium may exist in the labor
market because?
Give this one a try later!
of unpredictable shocks.
when are Fiscal policies less effective?
,Give this one a try later!
when the exchange rate is flexible and the economy is open
implementation lags
Give this one a try later!
the time is takes to put the desired policy into effect once economists and
policy makers recognize that the economy is in a boom or a slump
Diminishing returns in productivity
Give this one a try later!
In the absence of increase in the capital stock, as labor increase, less and
less output will be added by each new worker
Life-cycle theory of consumption
Give this one a try later!
a theory of household consumption: Households make lifetime
consumption decisions based on their expectations of lifetime income
, Determine if the statement below is true or false:
If Japan imposes a subsidy on car exports to the US, the price of cars in the US is likely
to increase
Give this one a try later!
False
The Lucas supply function, in combination with the assumption that expectations are
rational, implies that
Give this one a try later!
anticipated policy changes have no effect on real output
The main goal of stabilization is?
Give this one a try later!
use monetary and fiscal policy to smooth out fluctuations in output,
employment, and prices.
what occurs because of operation of the economy, or the time it takes for the
multiplier to reach its full value?
Give this one a try later!
