Exam 17: Macro Policy Debate: Active or Passive
Exam 1: The Art and Science of Economic Analysis162 Questions
Exam 2: Economic Tools and Economics Systems198 Questions
Exam 3: Economic Decision Makers207 Questions
Exam 4: Demand, supply, and Markets239 Questions
Exam 5: Introduction to Macroeconomics165 Questions
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Exam 7: Unemployment and Inflation208 Questions
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Exam 11: Aggregate Supply211 Questions
Exam 12: Fiscal Policy169 Questions
Exam 13: Federal Budgets and Public Policy161 Questions
Exam 14: Money and the Financial System212 Questions
Exam 15: Banking and the Money Supply234 Questions
Exam 16: Monetary Theory and Policy198 Questions
Exam 17: Macro Policy Debate: Active or Passive198 Questions
Exam 18: International Trade160 Questions
Exam 19: Externalities and the Environment201 Questions
Exam 20: International Finance232 Questions
Exam 21: Economic Development97 Questions
Exam 22: understanding Graphs73 Questions
Exam 23: National Income Accounts20 Questions
Exam 24: The Algebra of Demand-Side Equilibrium72 Questions
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The early Phillips curve showed a tradeoff between unemployment and inflation because it was drawn for a period in which the main source of instability was aggregate demand.
(True/False)
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The main policy conclusion of the rational expectations school is
(Multiple Choice)
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If the economy were in a recession,which of the following policies would a person who favors an active approach to policy be most likely to support?
(Multiple Choice)
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In the early 1960s,the discovery of the Phillips curve relationship caused economists and policy makers to think that they understood the tradeoffs between
(Multiple Choice)
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An important implication of the natural rate hypothesis is that regardless of concerns about __________,the government policy that results in __________ is generally the optimal long-run policy.
(Multiple Choice)
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Time required __________ is not a time lag associated with using discretionary policy to correct an economic problem.
(Multiple Choice)
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Which of the following statements supports the passive approach to a recessionary gap?
(Multiple Choice)
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If the advice of those who favor a passive approach to policy is correct,how would a recessionary gap eventually close?
(Multiple Choice)
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According to the rational expectations school,a correctly anticipated expansionary monetary policy will
(Multiple Choice)
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If the time for an economy to self-correct is shorter than the active policy lags,
(Multiple Choice)
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The natural rate hypothesis claims that policy makers can have considerable success in reducing unemployment through monetary and fiscal policy.
(True/False)
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Exhibit 16-3
-According to those who favor a passive approach to policy,where will the economy in Exhibit 16-3 end up once the expansionary gap is eliminated?

(Multiple Choice)
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Suppose that policy makers are concerned about a shortage of long-term capital investment.To remedy the problem,various plans to cut capital gains taxes have been suggested.The delay in picking a plan is called the
(Multiple Choice)
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Exhibit 16-1
-According to those who favor an active approach to policy,how can the economy shown in Exhibit 16-1 attain equilibrium at potential output?

(Multiple Choice)
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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.
(True/False)
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Which of the following is not a potential problem with active policy for policy makers?
(Multiple Choice)
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