Question 1

Using typical estimates of the sacrifice ratio, how much output would likely be sacrificed to reduce inflation from 4 percent to 2 percent?

Accepted Answer

The answer of Using typical estimates of the sacrifice ratio,...

Question 2

Using typical estimates of the sacrifice ratio, how much output would likely be sacrificed to reduce inflation by 3 percent?

Accepted Answer

The answer of Using typical estimates of the sacrifice ratio,...

Question 3

By law what goals are the Federal Reserve to pursue? What, if any, specific weights are given for these goals?

Accepted Answer

The answer of By law what goals are the Federal...

Question 4

One concern of those who oppose the central bank targeting inflation at zero is that reducing inflation is costly. What is the cost of reducing the inflation rate?

Accepted Answer

The answer of One concern of those who oppose the...

Question 5

Proponents of requiring the government to balance its budget argue that debt burdens future generations. Explain one claim they make to support this argument.

Accepted Answer

The answer of Proponents of requiring the government to balance...

Question 6

Approximately how often does the Federal Open Market Committee meet?

Accepted Answer

The answer of Approximately how often does the Federal Open...

Question 7

Which part of the Federal Reserve determines monetary policy? How often does it meet? What does it set a target for?

Accepted Answer

The answer of Which part of the Federal Reserve determines...

Question 8

According to a 1977 amendment to the Federal Reserve Act of 1913, what weights should the Fed put on the goals of maximum employment, stable prices, and moderate long-term interest rates?

Accepted Answer

The answer of According to a 1977 amendment to the...

Question 9

Provide two specific ways in which reducing inflation might leave "permanent scars" on the economy.

Accepted Answer

The answer of Provide two specific ways in which reducing...

Question 10

Suppose the nation's price level rises as a result of an increase in aggregate demand and a decrease in aggregate supply which leaves output unchanged. If the Fed is required to follow a rule that stabilizes the price level, what will the Fed do to the money supply and what impact will this have on total output in the economy?

Accepted Answer

The answer of Suppose the nation's price level rises as...

Question 11

Economists believe that a little bit of inflation may be a good thing. What are the potential benefits of inflation?

Accepted Answer

The answer of Economists believe that a little bit of...

Question 12

Advocates of cutting taxes rather than increasing government expenditures in response to a recession argue that the increase in spending by consumers and business may be more effective than that of the government. Explain this argument.

Accepted Answer

The answer of Advocates of cutting taxes rather than increasing...

Question 13

List two costs of inflation.

Accepted Answer

The answer of List two costs of inflation....

Question 14

What did the actions of the Federal Reserve during the 1990's demonstrate about monetary policy and rules?

Accepted Answer

The answer of What did the actions of the Federal...

Question 15

While traditional Keynesian analysis indicates that increases in government purchases are a more potent tool than decreases in taxes to stimulate the economy, what are some of the reasons why tax cuts might be preferred to increased government spending?

Accepted Answer

The answer of While traditional Keynesian analysis indicates that increases...

Question 16

According to a 1977 amendment to the Federal Reserve Act of 1913, what are the goals the Fed should promote?

Accepted Answer

The answer of According to a 1977 amendment to the...

Question 17

Those who believe the central bank should aim for zero inflation argue that reducing inflation is a policy with temporary costs and permanent benefits. What are the primary costs and benefits they are referring to?

Accepted Answer

The answer of Those who believe the central bank should...

Question 18

According to political business cycle theory, if the Fed wanted to increase the chances of a President's re­election, what specific actions might it take?

Accepted Answer

The answer of According to political business cycle theory, if...

Question 19

Explain what is meant by the time inconsistency of monetary policy.

Accepted Answer

The answer of Explain what is meant by the time...

Question 20

What is meant by the political business cycle?

Accepted Answer

The answer of What is meant by the political business...

Quiz 36: Six Debates Over Macroeconomic Policy

Using typical estimates of the sacrifice ratio, how much output would likely be sacrificed to reduce inflation from 4 percent to 2 percent?

Using typical estimates of the sacrifice ratio, how much output would likely be sacrificed to reduce inflation by 3 percent?

By law what goals are the Federal Reserve to pursue? What, if any, specific weights are given for these goals?

One concern of those who oppose the central bank targeting inflation at zero is that reducing inflation is costly. What is the cost of reducing the inflation rate?

Proponents of requiring the government to balance its budget argue that debt burdens future generations. Explain one claim they make to support this argument.

Approximately how often does the Federal Open Market Committee meet?

Which part of the Federal Reserve determines monetary policy? How often does it meet? What does it set a target for?

According to a 1977 amendment to the Federal Reserve Act of 1913, what weights should the Fed put on the goals of maximum employment, stable prices, and moderate long-term interest rates?

Provide two specific ways in which reducing inflation might leave "permanent scars" on the economy.

Economists believe that a little bit of inflation may be a good thing. What are the potential benefits of inflation?

Advocates of cutting taxes rather than increasing government expenditures in response to a recession argue that the increase in spending by consumers and business may be more effective than that of the government. Explain this argument.

List two costs of inflation.

What did the actions of the Federal Reserve during the 1990's demonstrate about monetary policy and rules?

While traditional Keynesian analysis indicates that increases in government purchases are a more potent tool than decreases in taxes to stimulate the economy, what are some of the reasons why tax cuts might be preferred to increased government spending?

According to a 1977 amendment to the Federal Reserve Act of 1913, what are the goals the Fed should promote?

Those who believe the central bank should aim for zero inflation argue that reducing inflation is a policy with temporary costs and permanent benefits. What are the primary costs and benefits they are referring to?

According to political business cycle theory, if the Fed wanted to increase the chances of a President's reelection, what specific actions might it take?

Explain what is meant by the time inconsistency of monetary policy.

What is meant by the political business cycle?

Quiz 36: Six Debates Over Macroeconomic Policy

Using typical estimates of the sacrifice ratio, how much output would likely be sacrificed to reduce inflation from 4 percent to 2 percent?

Using typical estimates of the sacrifice ratio, how much output would likely be sacrificed to reduce inflation by 3 percent?

By law what goals are the Federal Reserve to pursue? What, if any, specific weights are given for these goals?

One concern of those who oppose the central bank targeting inflation at zero is that reducing inflation is costly. What is the cost of reducing the inflation rate?

Proponents of requiring the government to balance its budget argue that debt burdens future generations. Explain one claim they make to support this argument.

Approximately how often does the Federal Open Market Committee meet?

Which part of the Federal Reserve determines monetary policy? How often does it meet? What does it set a target for?

According to a 1977 amendment to the Federal Reserve Act of 1913, what weights should the Fed put on the goals of maximum employment, stable prices, and moderate long-term interest rates?

Provide two specific ways in which reducing inflation might leave "permanent scars" on the economy.

Economists believe that a little bit of inflation may be a good thing. What are the potential benefits of inflation?

Advocates of cutting taxes rather than increasing government expenditures in response to a recession argue that the increase in spending by consumers and business may be more effective than that of the government. Explain this argument.

List two costs of inflation.

What did the actions of the Federal Reserve during the 1990's demonstrate about monetary policy and rules?

While traditional Keynesian analysis indicates that increases in government purchases are a more potent tool than decreases in taxes to stimulate the economy, what are some of the reasons why tax cuts might be preferred to increased government spending?

According to a 1977 amendment to the Federal Reserve Act of 1913, what are the goals the Fed should promote?

Those who believe the central bank should aim for zero inflation argue that reducing inflation is a policy with temporary costs and permanent benefits. What are the primary costs and benefits they are referring to?

According to political business cycle theory, if the Fed wanted to increase the chances of a President's re­election, what specific actions might it take?

Explain what is meant by the time inconsistency of monetary policy.

What is meant by the political business cycle?

According to political business cycle theory, if the Fed wanted to increase the chances of a President's reelection, what specific actions might it take?