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39-101
A c c e s s i b i l i t y :
Keyboard Navigation
216.
Crowding-out results from
217.
From a monetarist perspective, an expansionary fiscal policy's effect on aggregate demand
would be offset by
218.
According to rational expectations theory, discretionary monetary and fiscal policy will be
ineffective primarily because of the
39-102
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A.
successes of macroeconomic policymakers
B.
inability of policymakers to time decisions properly.
C. reaction of the public to the expected effects of policy changes.
D. slow impact of policy to stimulate changes in real output and employment.
219.
The theory of rational expectations calls for monetary policy rules because
220.
According to rational expectations theory, instantaneous market adjustments make
39-103
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Topic:
Rules or Discretion?
221.
In the rational expectations view,
222.
In the rational expectations view, the best approach to fiscal policy is for the government
to
223.
In 2012, the Fed adopted a flexible version of
39-104
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Remember
Difficulty:
01 Easy
Learning Objective: 39-03 Identify and describe the variations of the debate over " rules"
versus " discretion" in conducting stabilization policy.
Test Bank: II
Topic:
Rules or Discretion?
224.
With inflation targeting, the Federal Reserve would be required to announce its targeted
band for
225.
Under its recent policy of inflation targeting, the Fed has committed to adjusting monetary
policy as necessary to achieve a target inflation rate of
226.
Mainstream economists contend that a policy rule based on the equation of exchange
breaks down because
39-105
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A. there is a tight relationship between the money supply and nominal GDP.
B. velocity is more variable and unpredictable than expected.
C. the money supply increases at a constant, not a variable, rate.
D. nominal GDP is directly related to changes in the price level.
227.
In the mainstream view, the crowding-out effect from the use of fiscal policy is
228.
Which of the following ideas is associated with mainstream economics?
39-106
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Topic:
Rules or Discretion?
229.
Mainstream economists support
230.
Which economic perspective would be most closely associated with the view that
discretionary monetary policy is an effective force for stabilizing the economy?
231.
Which of the following economic perspectives would be most opposed to a balanced-
budget rule?
39-107
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c e s s i b i l i t y :
Keyboard Navigation
Blooms: Remember
Difficulty:
01 Easy
Learning Objective: 39-03 Identify and describe the variations of the debate over " rules"
versus " discretion" in conducting stabilization policy.
Test Bank: II
Topic:
Rules or Discretion?
232.
According to mainstream economic analysis, a balanced-budget rule for fiscal policy
would be
233.
An idea from monetarism that has been absorbed into mainstream macroeconomics would
be the
234.
Which monetarist idea has been absorbed into mainstream macroeconomics?
235.
The rational expectations view that expectations regarding policy and its effects are
important to consider
236.
According to rational expectations theory, observed instability in the private economy
would most likely be due to
39-109
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Difficulty:
02 Medium
Learning Objective: 39-04 Summarize the fundamental ideas and policy implications
of mainstream macroeconomics, monetarism, and rational expectations theory.
Test Bank: II
Topic:
Summary of Alternative Views
237.
The most likely advocates for a monetary rule would be
238.
The policy position that the supply of money should be increased at a constant rate each
year is most closely associated with the views of
239.
The view that anticipated changes in the money supply will have no effect on the
economy's output would most likely be a proposition of
39-110
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
C. real-business-cycle theory.
D. monetarism.
240.
Mainstream macroeconomics would suggest that fiscal policy
241.
Economist Abba Lerner compared the economy to a car needing
242.
Economist Milton Friedman compared the economy to a car needing
243.
According to economist Milton Friedman, a major reason for macroeconomic instability is
244.
In the aftermath of the Great Recession of 2007–2009, a new breed of "market
monetarists" suggested that the Fed and other central banks should use which of the following
to adjust monetary policy?
