Exam 14: Stabilization Policy in the Closed and Open Economy

Because of the lag of the effects of changes in monetary policy and the failure of forecasters to anticipate supply-side shocks as well as changes in money demand or velocity, activist policy changes have tended at times during the mid 1970's to

Gordon believes that the expansion which began in 1982 did so because of the

The Canadian experience with inflation and unemployment in the early 1990s has this to say about policy rules:

A major problem in developing an activist policy is

Economists who support a monetary rule as opposed to an activist monetary policy believe that the effectiveness lag in monetary policy is

According to the New Classical macroeconomic school

The non-activists believe that

By refusing to be time inconsistent, a central bank is ________ its reputation and ________ "policy credibility."

The length of money or commodity demand disturbances is important to the "policy activism" debate between non-activists and activists because

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

Non-activists are most interested in

The activists believe that

Which of the following does not contribute to the choice of a policy of hyperinflation?

The time between the policy decision and the subsequent change in policy instruments is called the

Which of the following changes should make activist policy makers more confident in their capacity to make good policy recommendations?

Supply shocks after 1985

The Fed's interest rate response to the rising output ratio experienced from 1997 to 1999 is explained by

The European Monetary Union which preceded the Euro was

The switch to flexible exchange rates in 1973 has made the effect of monetary policy on net exports a ________ important component of the monetary policy multiplier process, and thus has ________ the effectiveness lag.

The measure of the effectiveness lag for a change in monetary policy is the length of time necessary for ________ of the ultimate effect to be felt.