1. If an economy were experienceing a high rate of unemployment as the result of weak aggregate demand,
a. Keynesian economist would be most likely to recommend a. a reduction in taxes coupled with a reduction in government expenditures of equal size.
b. maintenance of a balanced budget.
c. an increase in government expenditures coupled with an increase in taxes of equal size.
d. a reduction in taxes, without any offsetting reduction in government expenditures.
2. The time period between when economic conditions change and when policy makers are aware of the change is called the
a. recognition lag
b. index of leading economic indicators
c. administrative lag
d. impact lag