Question :
21) In general, monetary policy has a longer ________ lag : 1381218
21) In general, monetary policy has a longer ________ lag than fiscal policy but shorter ________ lag.
A) recognition; response
B) implementation; recognition
C) implementation; response
D) response; implementation
22) Fiscal policy and monetary policy have a similar ________ time lag.
A) implementation
B) structural
C) recognition
D) response
Refer to the information provided in Figure 15.2 below to answer the questions that follow.
Figure 15.2
23) Refer to Figure 15.2. If the economy is currently at Point B and policy makers implement a policy which shifts the aggregate demand curve to AD1, the time the economy needs to make the adjustment is known as the
A) implementation lag.
B) recognition lag.
C) response lag.
D) frictional lag.
24) Refer to Figure 15.2. If economic policy causes aggregate demand curve shifts from AD2 to AD1, then
A) output decreases to Y0 and the price level decreases to P0.
B) output decreases to less than Y1.
C) the price level decreases lower than P0 and output decreases to Y0.
D) none of the above
25) Refer to Figure 15.2. If the economy is currently at Point B and policy makers implement a policy which decreases the aggregate demand curve to AD1,
A) the price level will rise.
B) the price level will fall.
C) GDP will rise.
D) the inflation rate will rise.
26) The implementation lag for fiscal policy tends to be much longer than for monetary policy because fiscal policy requires
A) changes in required reserves.
B) changes in open-market operations.
C) changes in congressional-approved spending and tax programs.
D) changes in exports and imports.
27) The ________ lag for monetary policy tends to be much shorter than for fiscal policy because only monetary policy requires rather immediate changes in open market operations.
A) recognition
B) implementation
C) response
D) reorganization
28) The implementation lag for monetary policy tends to be much shorter than for fiscal policy for all of the following reasons EXCEPT
A) fiscal policy changes requires both houses of Congress and the President to act.
B) monetary changes only require the Fed to act.
C) fiscal policy usually requires committee hearings in both houses of Congress.
D) fiscal policy changes only require the Fed to act.
29) During periods of slow growth, the Federal Reserve will likely
A) increase the money supply to increase interest rates.
B) increase the money supply to decrease interest rates.
C) decrease the money supply to increase interest rates.
D) decrease the money supply to decrease interest rates.
30) During periods of high growth and inflationary pressures, the Federal Reserve will likely
A) decrease the money supply to increase interest rates.
B) increase the money supply to decrease interest rates.
C) increase the money supply to increase interest rates.
D) decrease the money supply to decrease interest rates.
