Exam 21: The Role of Expectations in Macroeconomic Policy

Policy independence for the Federal Reserve is logically similar to allowing the ________.

Central bank credibility may be established by ________.

The "rational expectations revolution" refers to a substantial change in the thinking of ________.

Comment on the ability of a credible nominal anchor to allow policy makers to exploit a short-run trade-off between unemployment and inflation.

Adaptive expectations are formed ________.

The country with the lowest degree of central bank independence in the period 1973-88 was ________.

The use of expansionary fiscal and monetary policy just prior to elections is known as the ________.

If households have information that monetary policy is likely to change in the future,that information will play a role in forming ________.

Evidence suggests that,with rare exceptions,economic policies are not manipulated in an effort to influence electoral outcomes.Use the Lucas critique to explain why not.

An economic policy has a decent chance of working as intended,if ________.

Rational expectations theory suggests that ________.

Nominal GDP targeting ________.

Of these policies,which is the best example of constrained discretion?

What might an "anti-inflation hawk" do so that good macroeconomic performance is likely to continue under his or her successors as head of the central bank?

The immediate objective of a nominal anchor is to reduce the variability of ________.

The danger in using data to estimate the consequences of a proposed policy is that ________.

Expectations about the future will always be accurate if formed under ________.

When monetary policies result in a worsening of economic performance,the least likely explanation is ________.

The time-inconsistency problem involves the ________.

The adoption of inflation targeting in the United States ________.