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Chapter 19 - Current Issues in Macro Theory and Policy
1. The equation underlying the mainstream view of macroeconomics is:
2. The mainstream view is that macro instability is caused by:
Chapter 19 - Current Issues in Macro Theory and Policy
3. According to mainstream macroeconomists, U.S. macro instability has resulted from:
4. The mainstream view of macro instability is that:
5. Economist Milton Friedman is most closely associated with:
Chapter 19 - Current Issues in Macro Theory and Policy
6. Monetarists believe that:
7. According to monetarists:
8. The basic equation of monetarism is:
Chapter 19 - Current Issues in Macro Theory and Policy
9. The equation of exchange indicates that:
10. If M is $400, P is $4, and Q is 300, then V must be:
11. In the equation of exchange, the level of aggregate expenditures is indicated by:
Chapter 19 - Current Issues in Macro Theory and Policy
12. According to the equation of exchange, changes in the money supply can affect:
13. The velocity of money is the:
14. If a certain household earns and spends $24,000 per year and, on the average, holds a
money balance of $6,000, then the velocity of money for this household is:
Chapter 19 - Current Issues in Macro Theory and Policy
15. Which of the following is a component of the equation of exchange?
16. The velocity of money measures the:
17. In the equation of exchange V indicates the:
Chapter 19 - Current Issues in Macro Theory and Policy
18. At the equilibrium level of GDP:
19. The velocity of money is equal to:
20. The velocity of money is equal to:
Chapter 19 - Current Issues in Macro Theory and Policy
21. The equation of exchange suggests that, if the supply and velocity of money remain
unchanged, an increase in the physical volume of goods and services produced will cause:
22. If the amount of money in circulation is $180 billion and the value of the economy's total
output is $540 billion, then the:
Chapter 19 - Current Issues in Macro Theory and Policy
23. Refer to the above information. Nominal GDP is:
24. Refer to the above information. If the price level P is 4, Q is:
25. Refer to the above information. In equilibrium, Ig is:
Chapter 19 - Current Issues in Macro Theory and Policy
26. Most monetarists would say that:
27. Monetarists say that the relationship between the amount of money which households and
businesses want to hold and the level of national output and income:
28. Monetarist say:
Chapter 19 - Current Issues in Macro Theory and Policy
29. To determine the velocity of money you would need to know:
30. In a full-employment economy a rise in M will cause inflation unless:
31. As monetarists view the equation of exchange:
Chapter 19 - Current Issues in Macro Theory and Policy
32. Monetarists believe the private economy is inherently:
33. In the equation of exchange the nominal GDP is designated by:
34. If the money supply is constant when both nominal and real GDP are rising, we can
conclude that:
Chapter 19 - Current Issues in Macro Theory and Policy
35. If the nominal GDP is $477 billion and the velocity of money is 4.5, then the money
supply is:
36. According to monetarists, a change in the money supply changes:
37. Assume monetary equilibrium exists-that is, the desired and the actual supply of money
are equal-when nominal GDP equals $480 billion and the money supply is $160 billion.
According to a strict monetarist view, an increase in the money supply of $10 billion will
increase the nominal GDP by:
Chapter 19 - Current Issues in Macro Theory and Policy
38. According to monetarists, the Great Depression in the United States largely resulted
from:
39. The view that inappropriate monetary policy was the main reason for the depth of the
Great Depression in the United States is most closely associated with:
40. The real-business-cycle theory holds that business fluctuations are caused by:
Chapter 19 - Current Issues in Macro Theory and Policy
41. According to real business cycle theory:
42. In the real business cycle theory:
Chapter 19 - Current Issues in Macro Theory and Policy
43. Refer to the above diagram. A decline of aggregate supply from ASLR1 to ASLR2, followed
by a decline of aggregate demand from AD1 to AD2, would best describe the:
Chapter 19 - Current Issues in Macro Theory and Policy
44. Refer to the above diagram. The real-business cycle view of recession would best be
described by:
45. The real-business-cycle theory:
Chapter 19 - Current Issues in Macro Theory and Policy
46. Which of the following is not an aggregate-demand-side explanation of business cycles?
47. When most consumers and firms reduce spending only because they expect other
consumers and firms to reduce spending, and a recession results:
48. A coordination failure:
Chapter 19 - Current Issues in Macro Theory and Policy
49. The idea that an economy can get stuck in either an unemployment equilibrium or an
inflation equilibrium is most closely associated with:
50. Assume that many households and businesses reduce their spending only because they
expect other households and consumers to reduce their spending. Also suppose that all
households and consumers would be better off if they did not reduce their spending. This
situation best describes the:
51. New classical economists:
Chapter 19 - Current Issues in Macro Theory and Policy
52. Rational expectations theory is based on the assumption that:
53. Rational expectations theory implies that the:
