Question 1

Exhibit 17-3
  
-In Exhibit 17-3, the most desirable of the points shown is

Accepted Answer

A) point a 
B) point b 
C) point c 
D) point d 
E) point e 
A) point a 
B) point b 
C) point c 
D) point d 
E) point e

Question 2

The time it takes to identify and examine the nature and seriousness of an economic problem is the

Accepted Answer

A) activity lag 
B) decision-making lag 
C) effectiveness lag 
D) implementation lag 
E) recognition lag 
A) activity lag 
B) decision-making lag 
C) effectiveness lag 
D) implementation lag 
E) recognition lag

Question 3

After the 1960s, the short-run Phillips curve based on U.S. economic data

Accepted Answer

A) began shifting inward 
B) began shifting outward 
C) shifted little or none at all 
D) became virtually horizontal 
E) became virtually vertical 
A) began shifting inward 
B) began shifting outward 
C) shifted little or none at all 
D) became virtually horizontal 
E) became virtually vertical

Question 4

The Phillips curve shows

Accepted Answer

A) the relationship between the interest rate and the inflation rate 
B) the relationship between the inflation rate and the rate of unemployment 
C) the relationship between the unemployment rate and the level of real GDP 
D) the relationship between the growth rate and the inflation rate 
E) the relationship between the rate of unemployment and the growth rate 
A) the relationship between the interest rate and the inflation rate 
B) the relationship between the inflation rate and the rate of unemployment 
C) the relationship between the unemployment rate and the level of real GDP 
D) the relationship between the growth rate and the inflation rate 
E) the relationship between the rate of unemployment and the growth rate

Question 5

Some of those who favor a passive approach to policy disapprove of government intervention in the economy because they think government policy makers do not know which policy is correct.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not consistent with a self-correcting economy?

Accepted Answer

A) Market forces work relatively well in pushing the economy to potential GDP. 
B) Prices and wages are flexible. 
C) A contractionary gap is corrected through falling wages and prices. 
D) The short-run aggregate supply tends to shift until it intersects aggregate demand at potential GDP. 
E) An active approach to a recession or depression. 
A) Market forces work relatively well in pushing the economy to potential GDP. 
B) Prices and wages are flexible. 
C) A contractionary gap is corrected through falling wages and prices. 
D) The short-run aggregate supply tends to shift until it intersects aggregate demand at potential GDP. 
E) An active approach to a recession or depression.

Question 7

Advocates of policy rules rather than discretion believe that self-correction forces work too slowly when discretionary policy is used.

Accepted Answer

A) True 
 B)False

Question 8

One of the reasons fiscal and monetary policy can stimulate output and employment in the short run is that nominal wages increase faster than the price level.

Accepted Answer

A) True 
 B)False

Question 9

Exhibit 17-2
  
-According to those who favor a passive approach to policy, how will the economy shown in Exhibit 17-2 attain equilibrium at potential output?

Accepted Answer

A) The SRAS curve will shift to the left. 
B) The SRAS curve will shift to the right. 
C) Either the money supply or government spending should be increased. 
D) Either the money supply or government spending should be decreased. 
E) Aggregate demand should be decreased. 
A) The SRAS curve will shift to the left. 
B) The SRAS curve will shift to the right. 
C) Either the money supply or government spending should be increased. 
D) Either the money supply or government spending should be decreased. 
E) Aggregate demand should be decreased.

Exhibit 17-3 -In Exhibit 17-3, the most desirable of the points shown is

The time it takes to identify and examine the nature and seriousness of an economic problem is the

After the 1960s, the short-run Phillips curve based on U.S. economic data

The Phillips curve shows

Some of those who favor a passive approach to policy disapprove of government intervention in the economy because they think government policy makers do not know which policy is correct.

Which of the following is not consistent with a self-correcting economy?

Advocates of policy rules rather than discretion believe that self-correction forces work too slowly when discretionary policy is used.

One of the reasons fiscal and monetary policy can stimulate output and employment in the short run is that nominal wages increase faster than the price level.

Exhibit 17-2 -According to those who favor a passive approach to policy, how will the economy shown in Exhibit 17-2 attain equilibrium at potential output?

The Art and Science of Economic Analysis

Understanding Graphs-Appendix

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the Us Economy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Agregate Demand

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

International Trade

International Finance

Economic Development

Filters

Exam 18: Macro Policy Debate: Active or Passive

Exhibit 17-3 -In Exhibit 17-3, the most desirable of the points shown is

The time it takes to identify and examine the nature and seriousness of an economic problem is the

After the 1960s, the short-run Phillips curve based on U.S. economic data

The Phillips curve shows

Some of those who favor a passive approach to policy disapprove of government intervention in the economy because they think government policy makers do not know which policy is correct.

Which of the following is not consistent with a self-correcting economy?

Advocates of policy rules rather than discretion believe that self-correction forces work too slowly when discretionary policy is used.

One of the reasons fiscal and monetary policy can stimulate output and employment in the short run is that nominal wages increase faster than the price level.

Exhibit 17-2 -According to those who favor a passive approach to policy, how will the economy shown in Exhibit 17-2 attain equilibrium at potential output?

The Art and Science of Economic Analysis

Understanding Graphs-Appendix

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the Us Economy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Agregate Demand

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

International Trade

International Finance

Economic Development

Filters