Exam 15: Stabilization Policy, output, and Employment

Use the figure below to answer the following question(s). Figure 15-2 -According to the modern expectational Phillips curve illustrated in Figure 15-2,unemployment will equal the natural rate of unemployment when

The rational expectations hypothesis implies that discretionary macropolicy may be

Prior to World War II,

Which combination of signals is indicative that Fed policy is restrictive and that a shift to a more expansionary policy is in order?

The rational expectations hypothesis indicates that people

When persons overestimate inflation (when actual inflation is lower than was expected),actual unemployment will

The two most severe recessions of the post-World War II era occurred in 1981-1982 and 2008-2009.The policy responses to the two recessions were

The modern view of the Phillips curve suggests that

Which of the following is an implication of the modern view of the Phillips curve?

The index of leading indicators is

The effectiveness of monetary policy as a stabilization tool is limited by

The proponents of rational expectations believe that

An unanticipated shift to a more expansionary macro-policy that leads to a higher-than-expected rate of inflation will

Suppose Congress raises taxes and the monetary authorities slow the annual money supply growth from 10 percent to 5 percent.If decision makers accurately anticipate the impact of these policy changes on prices,

The interval between the recognition of a need for a policy change and when the policy change is instituted is called the

According to the rational expectations theory,expansionary monetary policy is fully effective only if

During the 1960s,most economists believed that expansionary macro-policy

If indicators like weak demand and falling commodity prices caused concern about deflation (falling prices),what could the Fed do to head off the deflationary threat?

Since the 1960s,macroeconomists have become more aware

Use the figure below to answer the following question(s). Figure 15-1 -In Figure 15-1,AD₁ and SRAS₁ indicate initial conditions in the goods and services market.In the short run,which of the following will most likely result from a shift to a more expansionary monetary policy under the rational expectations hypothesis?