Outside lags occur because
A) it takes time to identify a problem.
B) firms must change investment plans before monetary policy can be effective.
C) once changes are finally diagnosed and implemented, policies are immediately effective.
D) once a problem is diagnosed, it still takes time to implement policy changes.
Question 2
Which of the following is true?
i. A rational choice is made on the margin.
ii. Microeconomics is the study of the national economy while macroeconomics is the study of the global economy.
iii. Economists try to understand how the economic world works by testing normative statements.
A) only ii B) only i C) only iii D) i and ii E) i and iii
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