Exam 23: Six Debates Over Macroeconomic Policy: Should Monetary Policy Be Made by Rule Rather Than by Discretion

According to the political business cycle,after an election,unless the central bank acts inflation is likely to

Which of the following support the idea that monetary policy should be made by a rule?

A 1977 amendment to the Federal Reserve Act of 1913

Suppose that the central bank must follow a rule that requires it to increase the money supply when the price level falls and decrease the money supply when the price level rises.If the economy starts from long-run equilibrium and aggregate demand shifts right,the central bank must

The time inconsistency of policy implies that

As it is usually practiced,inflation targeting sets

Suppose that the central bank must follow a rule that requires it to increase the money supply when the price level falls and decrease the money supply when the price level rises.If the economy starts from long-run equilibrium and aggregate supply shifts left,the central bank must

The political business cycle refers to

Assume a central bank follows a rule that requires it to take steps to keep the price level constant.If the price level fell because of a decrease in aggregate demand and an increase in aggregate supply that kept output unchanged,then

A 1977 amendment to the Federal Reserve Act of 1913 says the Fed should "promote" which of the following goals?

The Federal Open Market Committee

The Federal Open Market Committee

According to the political business cycle theory,if the Fed wanted to see a President re-elected,prior to the election it might

Time inconsistency will cause the

The Federal Open Market Committee

Suppose that the central bank must follow a rule that requires it to increase the money supply when the price level falls and decrease the money supply when the price level rises.If the economy starts from long-run equilibrium and aggregate demand shifts right,the central bank must

If a government managed to reduce the time inconsistency problem by mandating that the central bank target inflation at a low rate,then

The time inconsistency of monetary policy means that

A law that requires the money supply to grow by a fixed percentage each year would eliminate

Who did President Jimmy Carter appoint to head the Federal Reserve beginning in 1979?