The existence of lags in designing and implementing fiscal policy illustrate some of the limitations of fiscal policy aimed at easing the burdens of a recession. which of the following statements best describes a situation when fiscal policy is more appropriate?
a. the economy is quick to self-correct but the recession is very severe.
b. the economy is slow to self-correct or the recession is very severe.
c. the implementation lag is shorter than the recognition and legislative lags.
d. fiscal policy favors tax cuts instead of increased government purchases since this removes the legislative lag.

Island novelties, inc., of palau makes two products—hawaiian fantasy and tahitian joy. each product's selling price, variable expense per unit and annual sales volume are as follows:

Suppose that the world price of steel is $100 a ton, india does not trade internationally, and the equilibrium price of steel in india is $60 a ton. suppose that india now begins to trade internationally. the price of steel in india the quantity of steel produced in india a. does not change; does not change b. falls; increases c. falls; decreases d. rises; decreases e. rises; increases the quantity of steel bought by india india steel. a. increases; exports b. decreases; imports c. decreases; exports d. does not change; neither imports nor exports e. increases; imports

Assume that the following conditions exist: a. all banks are fully loaned up- there are no excess reserves, and desired excess reserves are always zero. b. the money multiplier is 5 .     c. the planned investment schedule is such that at a 4 percent rate of interest, investment =$1450 billion. at 5 percent, investment is $1420 billion. d. the investment multiplier is 3 . e.. the initial equilibrium level of real gdp is $12 trillion. f. the equilibrium rate of interest is 4 percent now the fed engages in contractionary monetary policy. it sells $1 billion worth of bonds, which reduces the money supply, which in turn raises the market rate of interest by 1 percentage point. calculate the decrease in money supply after fed's sale of bonds: $nothing billion.