Exam 17: Macroeconomics: Events and Ideas

The recommendation to use monetary policy to stabilize the economy and use fiscal policy only when monetary policy is ineffective is consistent with _____ macroeconomics.

Which statement does NOT represent the broad consensus among macroeconomists?

Since 1982,the Bank of Canada has:

If a contraction in aggregate demand causes a recession,the Great Moderation consensus on macroeconomics suggests that:

Purchases and sales of short-term Treasury bills by the central bank is called quantitative easing.

The economist that warned that any attempt to alleviate the Great Depression with expansionary monetary policy "would,in the end,lead to a collapse worse than the one it was called in to remedy" was:

Which view of the macro economy holds that since the long-run growth of real GDP is 3%,the money supply should grow at 3%?

Milton Friedman and Anna Schwartz wrote:

Rational expectations theory suggests that people and firms base their expectations on:

The Great Moderation consensus in macroeconomics is that:

A policy of expansionary austerity involves increasing government spending to increase private-sector confidence,leading to an increase in output and employment.

In the late 1970s and early 1980s,the Bank of Canada:

Classical economists focused on short-run effects of monetary policy.

Policymakers before the Great Depression were:

The Great Moderation consensus is that the policymakers of the central bank should be elected so that they are responsible to the voters.

The belief that neither monetary nor fiscal policy can reduce unemployment is consistent with _____ economics.

Monetarists argue that:

Use the following to answer questions: -(Figure: Classical versus Keynesian Macroeconomics)Refer to Figure: Classical versus Keynesian Macroeconomics.According to the classical view,if this economy shifts from AD₂ to AD₁,perhaps because of a large increase in government spending,the price level will _____ and real GDP will _____.

Nearly all economists agree that fiscal policy _____ keep the economy _____.

Nancy believes that the best way to grow the economy is through tax cuts to increase the incentive to work and invest.Though these tax cuts might initially increase the budget deficit,Nancy is convinced that the economic growth that results will actually increase government tax revenue.Nancy is BEST described as a: