The proponents of ________ and ________ think that the Federal Reserve should adopt a constant monetary growth rule
A) new Keynesianism; the new classical model
B) the real business cycle model; Marxism
C) rational expectations; monetarism
D) the monetarist model; the Keynesian model
Answer: C
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Explain why the timing of fiscal policy may be more difficult than the timing of monetary policy
What will be an ideal response?
Briefly describe orthodox stabilization policies
What will be an ideal response?
The rate of return that financial investors require to hold a risky asset minus the rate of return on a safe asset is called the:
A. nominal interest rate. B. real interest rate. C. risk premium. D. discount rate.
Which of the following is NOT a commitment device?
A. A pre-nuptial agreement that provides for a large penalty in the event a spouse has an affair. B. A non-refundable advance payment to reserve a room at a resort. C. High fines for illegal parking on campus. D. A manufacturer's 2-year agreement to fix, at no cost to you, anything that breaks on your computer.