Exam 24: Money and Inflation

According to aggregate demand and supply analysis,inflation is caused by

The ________ lag is the time it takes for policymakers to be sure of what the data are signaling about the future course of the economy,while the ________ lag represents the time it takes to pass legislation to implement a particular (fiscal)policy.

The ________ lag is the time it takes for policymakers to obtain the data that tell them what is happening to the economy,while the ________ lag is the time it takes for policymakers to be sure of what the data are signaling about the future course of the economy.

The ________ lag is the time it takes for policymakers to be sure of what the information is signaling about the future course of the economy,while the ________ lag is the time it takes for policymakers to change policy instruments once they have decided on the new policy.

If policymakers set a target for unemployment that is too low because it is less than the natural rate of unemployment,this can set the stage for a higher rate of money growth and

This method of financing government spending is frequently called printing money because high-powered money (the monetary base)is created in the process.

Of the five time lags that prevent a discretionary policy from returning aggregate output to full employment instantaneously,two do not slow the effectiveness of monetary policy-the

If the Fed pursues a policy goal of

The financing of government spending by issuing debt

Aggregate demand and supply analysis conclude that continuously growing ________ will cause the price level to rise continually,thus generating inflation.

Only when budget deficits are financed by money creation does the increased government spending lead to ________ in the ________.

Kayla,an economist,is interested in knowing if government deficits have been a factor in explaining rapid money growth in her country in the past twenty years.What ratio should Kayla examine?

Evidence strongly supports the view that countries with high inflation also have

Financing government spending by selling bonds to the public,which pays for the bonds with currency,

If an economist were interested in testing whether government budget deficits had been the cause of excessive monetary growth for a country for the period 1950-2000,she would examine the behavior of

Economists usually view ________ policy as having a shorter implementation lag than ________ policy,but there is substantial uncertainty about how long this lag is.

The ________ lag represents the time it takes to pass legislation to implement a particular (fiscal)policy,while the ________ lag is the time it takes for policymakers to change policy instruments once they have decided on the new policy.

Which of the following would provide the strongest evidence that rapid money growth is the driving force behind inflation?

Advocates of nondiscretionary policy emphasize the importance of a constant money growth rate rule more than the balanced-budget amendment or restrictions on union power because

The ________ lag is the time it takes for policymakers to change policy instruments once they have decided on the new policy,while the ________ lag is the time it takes for the policy to actually have an impact on the economy.