Exam 17: Macroeconomics: Events and Ideas

Most economists now agree that:

Prior to the 1930s, the _____ model dominated thinking about how the economy worked.

Which argument was made in favor of using discretionary fiscal policy in fighting the Great Recession?

A monetarist rule would be to vary the money growth rate between set limits, such as 3% to 5% annual growth.

Monetary and fiscal policy can be used to reduce the natural rate of unemployment.

The Friedman-Phelps hypothesis claimed that the apparent trade-off between unemployment and inflation would NOT survive an extended period of:

According to a Keynesian economist, a recessionary gap should be fixed with:

What is the consensus among most economists today with respect to the management of unemployment?

According to the Great Moderation consensus today, an unemployment rate of 6% when the natural rate is 4.5% should be countered by:

According to the real business cycle theory, the primary source of fluctuations in real output is changes in the:

Macroeconomic policy activism:

The period of relative calm in the economy between 1985 and 2007 is called the:

The experience of the Great Depression led to the widespread acceptance of classical economics.

Monetarists argue that:

The start of an expansion is determined by the:

In the 1970s and first half of the 1980s, the U.S. economy had high inflation and high unemployment.

In response to the Great Depression, the classical economists:

Some Keynesian economists believed that at the cost of some inflation, the government could reduce the unemployment rate to a permanently low rate.

Keynes argued that the surest way to bring the economy out of the Great Depression was to:

_____ answers "no" to all five key questions about whether macroeconomic policy, either monetary or fiscal, can help fight recession, reduce unemployment, or should be used in a discretionary way.