Exam 14: Stabilization Policy in the Closed and Open Economy

Policy activists' hope that they can undertake successful stabilization policy is ________ by the fact that natural real GDP ________ during recessions.

Which of the following contributed to the negative output ratio experienced in the 1970s?

"Inflation Targeting Rule" is a special case of a:

The Fed has the least degree of discretion and the least to do under a policy rule setting

In Taylor Rule equation, high value of parameter a indicates that:

Fed policies since the mid-1980s have been intended to

Fiscal policy in the United States is hampered by its particularly long ________ lag.

Which of the following is NOT an argument of non-activists?

In the schematic theory of economic policy, consumer optimism is considered

Which of these policy targets does not provide a "nominal anchor?"

Twenty-four months after a 1 percentage point increase in the short-term (Treasury bill) interest rate, real GDP have fallen by about ________ in 1961-75, by ________ during 1976-1990, and by ________ during 1991-2007 period. 88-2004.

Central banks that are relatively free from political interference, and are thus ________ likely to be time inconsistent, generally have a ________ record of achieving low inflation.

To be successful in stabilizing AD, the application of a constant growth-rate rule for the money supply requires

Which of the following is likely to have the shortest transmission lag?

In the schematic theory of economic policy, the demand for money is considered

The "policy ineffectiveness proposition" of the new classical attack on policy activism is based on the idea that

The Euro, like the European Monetary Union which preceded it, is

The widespread, but not universal, consensus among economists would be to respond to

The activists' paradise requires

The major difference between the lag in monetary policy versus the lag in fiscal policy stems from the