Exam 21: The Influences of Monetary and Fiscal Policy on Aggregate Demand: Using Policy to Stabilize the Economy

Opponents of active stabilization policy

The most important automatic stabilizer is

Which of the following policy alternatives would be an appropriate response to a sharp increase in investment spending,assuming policymakers want to stabilize output?

Opponents of active stabilization policy

The primary argument against active monetary and fiscal policy is that

For the following questions,use the diagram below: Figure 34-7. -Refer to Figure 34-7.If the economy is at point b,a policy to restore full employment would be

Monetary policy

The lag problem associated with fiscal policy is due mostly to

Suppose stock prices rise.To offset the resulting change in output the Federal Reserve could

Which U.S.president,when asked why he had proposed a tax cut,responded by saying "To stimulate the economy.Don't you remember your Economics 101?"

Critics of stabilization policy argue that

In the early 1960s,the Kennedy administration made considerable use of

Suppose there was a large increase in net exports.If the Fed wanted to stabilize output,it could

Which of the following reduces the interest rate?

Suppose that businesses and consumers become much more optimistic about the future of the economy.To stabilize output,the Federal Reserve could

In 1961,President John F.Kennedy,acting upon advice from his economists,proposed tax cuts.The advice he received

During recessions,automatic stabilizers tend to make the government's budget

Which of the following policies would Keynes's followers support when an increase in business optimism shifts the aggregate demand curve away from long-run equilibrium?

A 2009 article in The Economist noted that

A policy that results in slow and steady growth of the money supply is an example of