Exam 36: Five Debates Over Macroeconomic Policy

If firms were faced with greater uncertainty because of concern that oil prices might rise,they might decrease expenditures on capital.In response to this change,someone who advocated "lean against the wind" policies might advocate

An individual would suffer higher losses by an unexpectedly higher inflation rate if

Suppose the budget deficit is rising 3 percent per year and nominal GDP is rising 5 percent per year.The debt created by these continuing deficits is

Double taxation means that both

Alan Blinder believes

What is the political business cycle and how does it relate to whether the central bank should have discretion or use a rule?

Zero inflation

Suppose a country has had a high and relatively stable inflation rate for a long time.How might this affect the costs and benefits of inflation reduction?

The time inconsistency of monetary policy means that

The laws that created the Fed give it some specific recommendations about what goals it should pursue so it has little discretion in making policy.

If the Fed followed a rule for monetary policy,the time inconsistency problem would be eliminated.

The economy goes into recession.Which of the following lists contains things policymakers could do to try to end the recession?

Which of the following is correct?

Which of the following expressions best sums up the mandate of members of the Federal Open Market Committee?

The Federal Open Market Committee

Which of the programs below would transfer wealth from the young to the old?

Paul Volcker's inflation reduction efforts

Proponents of zero inflation argue that a successful program to reduce inflation

An economist would be more likely to argue against reducing inflation if she thought that

Some countries have had high inflation for a long time.Others have had low or moderate inflation for a long time.Which of the following,at least in theory,could explain why some countries would continue to have high inflation?