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Title: If workers and firms have rational expectations, they understand that ________ monetary policy will ... Post by: hanbell795 on Feb 26, 2018 If workers and firms have rational expectations, they understand that ________ monetary policy will raise the inflation rate, so actual inflation ________ expected inflation.
A) contractionary; will be equal to B) contractionary; will be less than C) expansionary; will be greater than D) expansionary; will be equal to E) expansionary; will be less than Ques. 2 With a monetary growth rule as proposed by the monetarists, during a recession the rate of growth of the money supply would A) not change. B) increase. C) decrease. D) decrease or increase depending on economic conditions. Ques. 3 A decrease in individual income taxes ________ disposable income, which ________ consumption spending. A) decreases; increases B) increases; increases C) increases; decreases D) decreases; decreases Ques. 4 The multiplier is calculated as the A) change in autonomous expenditure/ change in real GDP. B) change in real GDP/ change in induced spending. C) change in real GDP/ change in autonomous expenditure. D) change in nominal GDP/ change in autonomous expenditure. Ques. 5 An increase in government spending will result in an increase in the price level and an increase in real GDP in the long run. Indicate whether the statement is true or false Ques. 6 The major criticism of real business cycle models is A) positive technology shocks actually push real GDP above the economy's potential GDP. B) this model relies too heavily on monetary explanations for fluctuations in real GDP. C) negative technology shocks actually push real GDP below the economy's potential GDP D) negative technology shocks are uncommon and can't explain all business cycle fluctuations. Ques. 7 To combat a recession with discretionary fiscal policy, Congress and the president should A) decrease taxes to increase consumer disposable income. B) decrease government spending to balance the budget. C) lower interest rates and increase investment by increasing the money supply. D) raise taxes on interest and dividends, but not on personal income. Ques. 8 Monetarists think that the Fed should use ________ as a target when conducting monetary policy. A) the inflation rate B) the Treasury bill rate C) the money supply D) the federal funds rate E) the unemployment rate Title: If workers and firms have rational expectations, they understand that ________ monetary policy will ... Post by: lilydidi on Feb 26, 2018 Content hidden
Title: If workers and firms have rational expectations, they understand that ________ monetary policy will ... Post by: hanbell795 on Feb 26, 2018 :white_check_mark: Will marking this solved...
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