The Existence of Lags Prevents the Instantaneous Adjustment of the Economy

question 20

Multiple Choice

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

• A)supply-side
• B)nondiscretionary
• C)discretionary
• D)demand-management

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Definitions:

Freight In Account

An accounting term used to describe the costs associated with transporting goods into a business, typically included as part of inventory costs.

Merchandise Purchased

Represents the total cost of goods bought for resale during a specific accounting period.

Credit Balance

A situation where the total credits in an account exceed the total debits, commonly seen in liability, revenue, and equity accounts.