If all the assumptions underpinning the policy irrelevance proposition are in place, fully anticipated monetary policy will
A. not change either the level of real Gross Domestic Product (GDP) or the unemployment rate.
B. affect the unemployment rate but have no impact on the level of real Gross Domestic Product (GDP).
C. effectively alter both the rate of unemployment and the level of real Gross Domestic Product (GDP).
D. have an impact on real Gross Domestic Product (GDP) but cannot alter the level of unemployment.
Answer: A
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To calculate the J-statistic you regress the
A) squared values of the TSLS residuals on all exogenous variables and the instruments. The statistic is then the number of observations times the regression R2. B) TSLS residuals on all exogenous variables and the instruments. You then multiply the homoskedasticity-only F-statistic from that regression by the number of instruments. C) OLS residuals from the reduced form on the instruments. The F-statistic from this regression is the J-statistic. D) TSLS residuals on all exogenous variables and the instruments. You then multiply the heteroskedasticity-robust F-statistic from that regression by the number of instruments.
The profit-maximizing output for the perfectly competitive firm occurs at the point at which
A) TR - MR is at a maximum. B) TR - TC is at a minimum. C) MR = MC. D) TR - ATC is at a maximum.
Normative analysis:
A. involves the formulation and testing of hypotheses. B. is a value-free evaluation of a policy. C. is a matter of values and opinions. D. examines if the policy actually accomplished its goal.
Healthcare price controls will lead to
a. more innovative healthcare treatments. b. waiting lines and lengthy delays for treatment. c. higher quality healthcare services. d. an increase in the supply of healthcare services.