Exam 17: Stabilization in an Integrated World Economy

Costs that tend to deter firms from changing their prices in response to changes in the market equilibrium price are referred to as

According to some New Keynesian theories,one possible rationale for active policy making is

An example of nondiscretionary policy making is

The menu cost theory suggests that

Which of the following holds that business cycles are primarily due to changes in technology and does not invoke any monetary or demand-side forces?

Economists who believe in activist policy making argue that

The Phillips Curve will shift when

According to the real business cycle theory,which of the following would be a real disturbance to the economy?

The stagflation experienced in the U.S.during the late 1960s and the 1970s showed us that

The real business cycle theory is based on all of the assumptions below EXCEPT

One economic hypothesis states that people form expectations by combining the effects of past policy changes on important economic variables with their own judgment about the future effects of current and future policy changes,and then react accordingly.This is known as the

What is the modern view of the Phillips curve?

An unexpected increase in aggregate demand causes

One result of an unanticipated reduction in aggregate demand would be that

The idea of policy making taking place in response to a predetermined set of rules is referred to as

The policy irrelevance proposition suggests that the policy effects on the economy primarily occur as a result of

According to the text,minimum-wage laws cause increases in

Suppose that the economy is in long-run equilibrium and the government decided to engage in expected expansionary policy by increasing the money supply.If we assume rational expectations,which of the following statements is correct about the effect of expansionary policy in the long run?

Stagflation means a

New Keynesians conclude that