Question 1

Professor John Taylor suggested using which set of values for the Taylor rule?

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)    A

Question 2

As of 2016, which country has an explicit inflation target of 3 percent?

Accepted Answer

A)  the United States 
B)  the United Kingdom 
C)  Japan 
D)  the euro area 
E)  None of these answers is correct. 
A)  the United States 
B)  the United Kingdom 
C)  Japan 
D)  the euro area 
E)  None of these answers is correct. E

Question 3

Refer to the following figure when answering the following questions.
Figure 13.1: AD Curve  
-Consider Figure 13.1, beginning at point e. If there is a change in the inflation rate:

Accepted Answer

A)  there is movement along the AD curve to point b. 
B)  the AD curve shifts right to point a. 
C)  the AD curve shifts left to point g. 
D)  there is movement along the AD curve to point d. 
E)  Not enough information is given. 
A)  there is movement along the AD curve to point b. 
B)  the AD curve shifts right to point a. 
C)  the AD curve shifts left to point g. 
D)  there is movement along the AD curve to point d. 
E)  Not enough information is given. E

Question 4

In the simple monetary policy rule   ,  
Represents:

Accepted Answer

A)  the marginal product of capital. 
B)  how sensitive monetary policy is to changes in inflation. 
C)  the deviation of the inflation rate from the target rate. 
D)  the target rate of inflation. 
E)  the risk premium. 
A)  the marginal product of capital. 
B)  how sensitive monetary policy is to changes in inflation. 
C)  the deviation of the inflation rate from the target rate. 
D)  the target rate of inflation. 
E)  the risk premium.

Question 5

Use the aggregate supply/aggregate demand model in Figure 13.4 to answer the following scenario. The United Auto Workers were able to negotiate a contract for higher wages and better benefits. The economy initially moves from point ________ to point ________; eventually the economy returns to the steady state at point ________.

Accepted Answer

A)  c; d; a 
B)  a; d; a 
C)  c; a; b 
D)  b; a; c 
E)  Not enough information is given. 
A)  c; d; a 
B)  a; d; a 
C)  c; a; b 
D)  b; a; c 
E)  Not enough information is given.

Question 6

Policy is conducted by discretion if policymakers:

Accepted Answer

A)  size up the economy and choose whatever policy seems appropriate at the time. 
B)  announce in advance how policy will respond to various situations and commit themselves to following through on this announcement. 
C)  maintain a constant growth rate of the money supply without making their decision public. 
D)  announce and achieve a balanced government budget. 
E)  announce and maintain a constant interest rate. 
A)  size up the economy and choose whatever policy seems appropriate at the time. 
B)  announce in advance how policy will respond to various situations and commit themselves to following through on this announcement. 
C)  maintain a constant growth rate of the money supply without making their decision public. 
D)  announce and achieve a balanced government budget. 
E)  announce and maintain a constant interest rate.

Question 7

Between the third and fourth quarters of 2006, the housing bubble burst in the United States. Using the AS/AD framework to discuss the impact of this macroeconomic event, begin and end in the long run.

Accepted Answer

The answer to this is essentially the op

Question 8

Which of the following equations, discussed in the text, can be used to predict the federal funds rate?

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 9

A policy rule that dictates what interest rates monetary policy should follow is:

Accepted Answer

A)  written down. 
B)  at the discretion of the president. 
C)  at the discretion of the chairman of the Federal Reserve. 
D)  independent of the state of the economy. 
E)  a function of the state of the economy. 
A)  written down. 
B)  at the discretion of the president. 
C)  at the discretion of the chairman of the Federal Reserve. 
D)  independent of the state of the economy. 
E)  a function of the state of the economy.

Question 10

If the simple Taylor rule models the "ideal" federal funds rate, the ________ displayed a monetary policy that was too loose.

Accepted Answer

A)  1960s 
B)  1970s 
C)  1980s 
D)  1990s 
E)  2000s 
A)  1960s 
B)  1970s 
C)  1980s 
D)  1990s 
E)  2000s

Question 11

The Lucas critique states that it is better for economists to use adaptive rather than rational expectations in their macroeconomic models.

Accepted Answer

A) True 
 B)False

Question 12

Policymakers will find it easier to achieve their goals by sticking to policy rules rather than discretion if they face the problem of:

Accepted Answer

A)  very short policy lags. 
B)  adaptive expectations. 
C)  time inconsistency. 
D)  discretionary fiscal policy. 
E)  a weak central bank. 
A)  very short policy lags. 
B)  adaptive expectations. 
C)  time inconsistency. 
D)  discretionary fiscal policy. 
E)  a weak central bank.

Question 13

An increase in the inflation target would shift the AD to the left.

Accepted Answer

A) True 
 B)False

Question 14

The simple monetary policy rule may contain which of the following?

Accepted Answer

A)  short-term output 
B)  the inflation rate 
C)  the unemployment rate 
D)  All of these answers are correct. 
E)  None of these answers is correct. 
A)  short-term output 
B)  the inflation rate 
C)  the unemployment rate 
D)  All of these answers are correct. 
E)  None of these answers is correct.

Question 15

A change in which of the following parameters does NOT shift the AD curve   ?

Accepted Answer

A)    
B)    
C)    
D)    
E)  None of these answers is correct. 
A)    
B)    
C)    
D)    
E)  None of these answers is correct.

Question 16

Since the 1990s, the country with the lowest rate of inflation has been the United States.

Accepted Answer

A) True 
 B)False

Question 17

As of 2016, which country has an explicit inflation target of 2 percent?

Accepted Answer

A)  Norway 
B)  Mexico 
C)  Japan 
D)  Brazil 
E)  Russia 
A)  Norway 
B)  Mexico 
C)  Japan 
D)  Brazil 
E)  Russia

Question 18

Refer to the following figure when answering the following questions.
Figure 13.3: Aggregate Supply Curve  
-Consider Figure 13.3. Over the past few years the "Arab Spring" has caused radical political and economic changes, particularly in Syria, Egypt, and Libya. These events can be characterized in the aggregate supply curve as a movement from point ________ to point ________.

Accepted Answer

A)  d; a 
B)  c; a 
C)  a; d 
D)  e; b 
E)  c; b 
A)  d; a 
B)  c; a 
C)  a; d 
D)  e; b 
E)  c; b

Question 19

If   is close to zero, monetary policy is relatively ________ and the AD curve is ________.

Accepted Answer

A)  aggressive; relatively flat 
B)  permissive; relatively steep 
C)  aggressive; relatively steep 
D)  permissive; relatively flat 
E)  permissive; vertical 
A)  aggressive; relatively flat 
B)  permissive; relatively steep 
C)  aggressive; relatively steep 
D)  permissive; relatively flat 
E)  permissive; vertical

Question 20

Define the steady state in the AS/AD framework.

Accepted Answer

In the ste

Professor John Taylor suggested using which set of values for the Taylor rule?

As of 2016, which country has an explicit inflation target of 3 percent?

Refer to the following figure when answering the following questions. Figure 13.1: AD Curve -Consider Figure 13.1, beginning at point e. If there is a change in the inflation rate:

In the simple monetary policy rule , Represents:

Policy is conducted by discretion if policymakers:

Between the third and fourth quarters of 2006, the housing bubble burst in the United States. Using the AS/AD framework to discuss the impact of this macroeconomic event, begin and end in the long run.

Which of the following equations, discussed in the text, can be used to predict the federal funds rate?

A policy rule that dictates what interest rates monetary policy should follow is:

If the simple Taylor rule models the "ideal" federal funds rate, the ________ displayed a monetary policy that was too loose.

The Lucas critique states that it is better for economists to use adaptive rather than rational expectations in their macroeconomic models.

Policymakers will find it easier to achieve their goals by sticking to policy rules rather than discretion if they face the problem of:

An increase in the inflation target would shift the AD to the left.

The simple monetary policy rule may contain which of the following?

A change in which of the following parameters does NOT shift the AD curve ?

Since the 1990s, the country with the lowest rate of inflation has been the United States.

As of 2016, which country has an explicit inflation target of 2 percent?

If is close to zero, monetary policy is relatively and the AD curve is .

Define the steady state in the AS/AD framework.

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market, Wages, and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 13: Stabilization Policy and the Asad Framework

Professor John Taylor suggested using which set of values for the Taylor rule?

As of 2016, which country has an explicit inflation target of 3 percent?

Refer to the following figure when answering the following questions. Figure 13.1: AD Curve -Consider Figure 13.1, beginning at point e. If there is a change in the inflation rate:

In the simple monetary policy rule , Represents:

Policy is conducted by discretion if policymakers:

Between the third and fourth quarters of 2006, the housing bubble burst in the United States. Using the AS/AD framework to discuss the impact of this macroeconomic event, begin and end in the long run.

Which of the following equations, discussed in the text, can be used to predict the federal funds rate?

A policy rule that dictates what interest rates monetary policy should follow is:

If the simple Taylor rule models the "ideal" federal funds rate, the ________ displayed a monetary policy that was too loose.

The Lucas critique states that it is better for economists to use adaptive rather than rational expectations in their macroeconomic models.

Policymakers will find it easier to achieve their goals by sticking to policy rules rather than discretion if they face the problem of:

An increase in the inflation target would shift the AD to the left.

The simple monetary policy rule may contain which of the following?

A change in which of the following parameters does NOT shift the AD curve ?

Since the 1990s, the country with the lowest rate of inflation has been the United States.

As of 2016, which country has an explicit inflation target of 2 percent?

If is close to zero, monetary policy is relatively ________ and the AD curve is ________.

Define the steady state in the AS/AD framework.

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market, Wages, and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

If is close to zero, monetary policy is relatively and the AD curve is .