Exam 23: Six Debates Over Macroeconomic Policy: Should Monetary and Fiscal Policymakers Try to Stabilize the Economy

"Leaning against the wind" is exemplified by a(n)

The Fed lowered interest rates in 2007 and 2008.This implies,other things the same,that the Fed

Suppose aggregate demand fell.In order to stabilize the economy,the government might

The Fed lowered interest rates in 2001 and 2002.This implies,other things the same,that the Fed

Fluctuations in employment and output result from changes in

If the natural rate of unemployment is 6%,but the Fed thinks it is 5% and attempts to use monetary policy to move unemployment from 6% to 5%,then in the short run which of the following variables will the Fed's policy raise?

In the summer of 2008,consumers indicated that they were less optimistic about the future of the economy.Such a change in sentiment is likely to

If firms were faced with greater uncertainty because of concern that oil prices might rise,they might decrease expenditures on capital.In response to this change,someone who advocated "lean against the wind" policies might advocate

Policymakers following a "lean against the wind" policy would

Which of the following is correct?

The Fed raised interest rates in 2004 and 2005.This implies,other things the same,that the Fed

A policymaker in favor of stabilizing the economy would be likely to believe

The effects of a decline in the value of financial assets,such as stocks,on consumption and the economy might be offset by

If financial turmoil overseas reduces U.S.net exports,then those in favor of "lean against the wind policies" would advocate

Suppose there is a decrease in short-run aggregate supply.If the Federal Reserve wants to stabilize output it should

If the Fed announced its intention to sell bonds,then it would be signaling that it was going to

The Federal Reserve will tend to tighten monetary policy when

Studies have shown significant spending changes arise from interest rate changes after

President George W.Bush and congress cut taxes and raised government expenditures in 2003.According to the aggregate supply and aggregate demand model

Which of the following is an argument against trying to use policy to stabilize the economy?