Exam 25: Monetary Policy Theory

Demand-pull inflation can result when ________.

Figure 27-3 -In the new classical model in Figure 27-3,the long-run effect of an unanticipated monetary contraction ________.

The monetarist-Keynesian debate on the importance of monetary policy is unresolved because monetarists and Keynesians focus on two different types of evidence that generate conflicting conclusions.Monetarists tend to focus on ________.

Monetarists contend that the channels of monetary influence in Keynesian structural models are too ________ defined,________ the importance of monetary policy.

In the new classical model,________.

Evidence that is based on a variable having its effect on another variable through channels rather than a direct effect is known as ________.

Figure 27-3 -In the new classical model in Figure 27-3,the long-run effect of an unanticipated monetary expansion ________.

Figure 27-3 -In the new classical model in Figure 27-3,an unanticipated contractionary monetary policy ________.

What is the statistical evidence of early monetarists on the importance of money?

By the standard of low-grade bonds,interest rates were ________ and monetary policy was ________ during the Great Depression.

Figure 27-3 -In the new classical model in Figure 27-3,an anticipated expansionary monetary policy ________.

In a study published in 1963,Milton Friedman and Anna Schwartz found that in every business cycle they studied over nearly a hundred-year period,the growth rate of the ________ decreased before ________ decreased.

The reduced form approach ________ the way monetary policy affects the economy and may be ________ likely to spot the full effect of changes in M on Y.

Figure 27-3 -In the new classical model in Figure 27-3,an anticipated contractionary monetary policy ________.

Because ________ evidence is of a ________ nature,there is always the possibility of reverse causation,in which output growth causes money growth.

The implementation lag is ________.

The recognition lag is ________.

Which of the following is most likely to lead to inflationary monetary policy?

The economist who proposed that,"Inflation is always and everywhere a monetary phenomenon" was ________.

If aggregate output is below the natural rate level,activists of policies would recommend that the government ________.