The Existence of Lags Prevents the Instantaneous Adjustment of the Economy

question 44

Multiple Choice

The existence of lags prevents the instantaneous adjustment of the economy to policies changing aggregate demand,thereby strengthening the case for

• A)supply-side policy.
• B)nonactivists.
• C)activists.
• D)demand-management policy.

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Definitions:

Centre of Gravity

A geographical location that minimizes transportation costs for a company, considering the locations of suppliers, manufacturing facilities, and markets.

Fixed Cost

Costs that remain constant regardless of the amount of goods produced or sold, like lease payments, employee wages, and insurance fees.

Expansion Options

Strategic choices available to a business to increase its size, offerings, or operational capacity.