When Studying the Effects of Changes in Public Policy,economists Believe

question 237

Multiple Choice

When studying the effects of changes in public policy,economists believe that

• A)it is important to distinguish between the short run and the long run.
• B)the assumptions used in studying those effects should be the same for the short run as for the long run.
• C)the short-run effects of those changes are always more beneficial to society than are the long-run effects.
• D)the long-run effects of those changes are always more beneficial to society than are the short-run effects.

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Definitions:

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Hourly Wage

The rate of pay per hour for employment, used to calculate total earnings based on the number of hours worked.

Rates of Inflation

The percentage rate at which the general level of prices for goods and services is rising.

Pace

The speed or rate at which something happens, often used to measure progress or activity levels.