Question 1
Refer to the information provided in Figure 29.1 below to answer the question(s) that follow.
Refer to Figure 29.1. If policy makers decide to on a policy at Point
t
5 but it does not affect the economy until period
t
7, then the policy choice is likely to be
◦ ineffective.
◦ optimal.
◦ inappropriate.
◦ None of these.
Question 2
Refer to the information provided in Figure 29.1 below to answer the question(s) that follow.
Refer to Figure 29.1. If policy makers decide on a policy at Point
t
4 but it does not affect the economy until period
t
7, then the policy choice is likely to be
◦ destabilizing.
◦ stabilizing.
◦ optimal.
◦ automatically stabilizing.