Exam 10: The Goals of Stabilization Policy: Low Inflation and Low Unemployment

The short-run simulative effect of a government budget deficit on real GDP is stronger with ________ financing,since this ________ the crowding out effect of the deficit.

Many extended periods of high actual unemployment above the natural rate have been the result of

If a rise in anticipated inflation produces for some reason a less-than-equal rise in the nominal interest rate,this ________ the costs of anticipated inflation by ________ saving.

When the misery index is used to judge macroeconomic conditions,reducing inflation by one percentage point

From the quantity equation we find that the rate of inflation is equal by definition to the growth rate of the money supply ________ the growth rate of velocity ________ the growth rate of real GDP.

Which of the following would NOT reduce the natural rate of unemployment?

The "Fisher Effect" occurs when a one-percentage-point rise in expected inflation ________ interest rate by one percentage point

According to Gordon,the main losers due to the redistributive effect of the postwar inflation in the United States were

If other things are constant,the longer the average unemployed worker searches before accepting a job

When the economy is near the natural unemployment rate,most adult males looking for work are experiencing ________ unemployment.

The three sources of government revenue are taxes,the ________ of government bonds,and the ________ of high-powered money.

A program of complete indexation would

From the quantity equation we find that the rate of inflation is equal by definition to the growth rate of nominal GDP ________ the growth rate of real GDP.

If short-term government bond rates were indexed

Suppose the private sector wishes to hold a constant level of real high-powered money.This means that with an ongoing inflation of p percent,each year the government treasury can obtain goods from the private sector in exchange for ________ p times the existing high-powered money,a government revenue source called ________.

Investment and saving decisions are assumed by economists to depend on the ________ interest rate.

Rising velocity means that people want to hold ________ nominal money per dollar of nominal GDP,which ________ the inflationary tendency of an increase in the money supply as one way of re-equating the demand and supply of money.

According to Gordon,there is no pressing need for policies to reduce ________ unemployment.

The textbook cites an estimate of the "sacrifice ratio" in the United States of approximately

Supply shocks are a potential source of higher inflation,unless the government counters with ________ policy that ________ the money growth rate.