Exam 26: Controversies Over Stabilization Policy

Until the Great Depression of the 1930s,the prevailing theory on the price level was the ________ theory.

A contemporary economist closely associated with the hypothesis of rational expectations is

The new classical macroeconomists conclude that

The effectiveness of a market economy's self-regulating mechanisms in stabilizing the economy is most closely associated with

The high rates of inflation in the late 1970s and early 1980s fell primarily because of

Supply-side economics had its greatest influence on economic policy debate during the

When a central bank is required to provide enough information for markets and the public to understand and evaluate what the monetary authorities are doing,the central bank must have adopted a monetary policy framework known as

Proponents of real business cycle models argue that the correlation between changes in the money supply and changes in real GDP may reflect the fact that

The view that business cycles are the natural (indeed efficient)response of the economy to changes in technology and the availability of resources is associated with the

Workers and firms prefer to enter into long-term contracts because

Some argue that according to implicit contract theory,unemployment is really voluntary since

Critics of real business cycle models argue that

A basic assumption of the new classical macroeconomists is that

The monetarist view gained adherents in the late 1960s because

Fine-tuning the economy

With regard to the effectiveness of stabilization policies,the new classical macroeconomists conclude that

Proponents of policy activism argue that the time period required for wages and prices to adjust during a severe recession would be

According to real business cycle models

Multiyear labor contracts slow the rate of adjustment of wages because

Costs incurred by a firm when it changes its prices are called ________ costs.