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Economics
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12 Dec 2019

Please help with this study question:

The time between the implementation of a fiscal action and when that action affects output, employment, or the price level is called a(n):

a.

operational lag.
b.

recognition lag.
c.

administrative lag.
d.

implementation lag.

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Related questions

1. The opportunity cost of holding money is the:___.

a. nominal interest rate.

b. unemployment rate.

c. federal funds rate.

d. prevailing mortgage rate.

2. If government debt is not changing, then:___.

a. the economy is at long-run equilibrium.

b. the government’s budget must be balanced.

c. GDP must equal the natural rate of output.

d. capital per worker is constant.

3.The Taylor rule for monetary policy relates the output gap and inflation to the:___.

a. velocity of money.

b. reserve requirement on deposits.

c. federal funds rate.

d. meeting schedule of the FOMC

4. The inside lag is the:___.

A) time between a shock to the economy and the policy action responding to that shock.

B) time between a policy action and its influence on the economy.

C) time between a shock to the economy and the influence on the economy of a policy action.

D) difference between the time it takes to implement monetary policy and the time it takes to implement fiscal policy.

Short answer?

What causes shifts in the IS or LM curves?

1. Impact of Monetary Policy How does the Fed’s monetary policy affect economic conditions?

2. Trade-offs of Monetary Policy Describe the economic trade-off faced by the Fed in achieving its economic goals.

3. Choice of Monetary Policy When does the Fed use a loose-money policy, and when does it use a tight- money policy? What is a criticism of a loose-money policy? What is the risk of using a monetary policy that is too tight?

4. Active Monetary Policy Describe an active monetary policy.

5. Passive Monetary Policy Describe a passive monetary policy.

6. Fed Control Why may the Fed have difficulty controlling the economy in the manner desired? Be specific.

7. Lagged Effects of Monetary Policy

Compare the recognition lag and the implementation lag.

8. Fed’s Control of Inflation Assume that the Fed’s primary goal is to reduce inflation. How can it use open market operations to achieve this goal? What is a possible adverse effect of such action by the Fed (even if it achieves the goal)?

9. Monitoring Money Supply Why do financial market participants closely monitor money supply movements?

10. Monetary Policy during the Credit Crisis

Describe the Fed’s monetary policy response to the credit crisis.

22. The Fed’s Impact on the Housing Market In periods when home prices declined substantially, some homeowners blamed the Fed. In other periods, when home prices increased, homeowners gave credit to the Fed. How can the Fed have such a large impact on home prices? How could news of a substantial increase in the general inflation level affect the Fed’s monetary policy and thereby affect home prices?

Life has become yet more complicated. Government spending works with a distributed lag. Now when $1 billion is spent today, GDP increases by $1 billion this period and $1.5 billion next period.

a. What happens to the path of GDP if government spending rises enough this period to put GDP back to its potential level this period?

b. Suppose fiscal policy actions are taken to put GDP at its potential level this period. What fiscal policy will be needed to put GDP on target next period?

c. Explain why the government has to be so active in keeping GDP on target in this case.

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