Exam 32: Alternative Views in Macroeconomics

Related to the Economics in Practice on p. 645: Surveys by the bank of England suggest that two important factors in influencing consumer perceptions of inflation are ________ and ________.

The Lucas supply function, in combination with the assumption that expectations are rational, implies that if a monetary policy change is announced to the public, the actual price level

Nearly $2 trillion was added to the national debt between 1983 and 1992.

The Lucas supply function, in combination with the assumption that expectations are rational, implies that if a monetary policy change is announced to the public

The Economic Recovery Tax Act of 1981 ________ in a way that was designed to stimulate capital investment.

Reduction of government regulation is a stimulative aggregate supply policy.

According to monetarists

Traditional macroeconomic models assume that people's expectations of inflation

Empirical evidence suggests that from 1960 until 2007, the velocity of money had, on average, been

Refer to the information provided in Figure 32.2 below to answer the question(s) that follow. Figure 32.2 -Refer to Figure 32.2. According to monetarists, an expansionary fiscal policy in the long run and after all the adjustments have been made

According to the Lucas supply function, ________ no effect on real output.

Fluctuations in velocity tend to increase when measured using M1 instead of M2.

The Lucas supply function, in combination with the assumption that expectations are rational, implies that if a monetary policy change is announced to the public

The rational-expectations hypothesis implies that there is no need for government stabilization policies.

The Lucas supply function incorporates the idea that output depends on the difference between the actual price level and the expected price level.

Traditional treatments of macroeconomic expectations are not consistent with the assumptions of

Monetarists believe

________ economics includes the idea that labor markets don't always clear due to wage rigidities.

With the Lucas supply function, a price ________ means actual price is either greater than or lower than expected price.

Many economists challenged the idea of activist government intervention in the economy following the