Exam 14: The Goals, tools, and Rules of Monetary Policy

To non-activists,which of the following is the most useful stabilization policy?

Based on the record of past business cycles as well as Fed behavior,we can estimate that for expansionary monetary policy the overall lag is approximately

Observers of the economy often complain that indicators of economic activity are often contradictory.This is an example of the ________ lag.

Typically the data lag is about

The lag between changes in the Fed's interest rate target and large responses of output means that the Fed may want to ________ interest rates ________ output recovers to its natural level.

Linking policy instruments to target variables are the

Which of the following multiplier concepts is most important from the point of view of devising an activist policy?

Even a monetary policy based on a rigid high-powered money growth rate rule can lack policy credibility,due in part to ________,while a policy that targets the inflation rate itself ________.

Which of the following monetary policies could reduce the amplitude of oscillations of output around its natural level?

The European Monetary Union,which preceded the Euro,was

The "effectiveness lag" in monetary policy is the amount of time it takes

The "policy ineffectiveness proposition" of the new classical attack on policy activism is based on the idea that

By refusing to be time inconsistent,a central bank is ________ its reputation and ________ "policy credibility."

In the long run,monetary and fiscal policies have no control over

The longest lag monetary policy suffers is the ________ lag.

Dividing fiscal policy into two instruments has the effect of introducing another policy target:

Activists-believe that AD is unstable because

Sources of reduced volatility of demand shocks include all of the following EXCEPT

Monetarists believe that there is a ________ link between money supply growth and target variables and that the public is ________ in movements in the money supply.

According to the Monetarists,"Policy activism" is difficult if not impossible to perform successfully because