On October 6, 1979, the Federal Reserve abandoned the strategy of targeting the Federal funds rate and focused on target ranges for growth in the monetary aggregates. Since that time, the Federal Reserve
a. has never deviated from that strategy.
b. gave up on interest rate targeting.
c. deviated from target ranges for growth in the monetary aggregates when inflation and unemployment were high.
d. None of the above
D
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Draw a production function and illustrate the effects of capital investment and technological improvement on labor productivity
Which of the following is correct if there is an adverse supply shock?
a. The short-run aggregate supply curve and the short-run Phillips curve both shift right. b. The short-run aggregate supply curve and the short-run Phillips curve both shift left. c. The short-run aggregate supply curve shifts right and the short-run Phillips curve shifts left. d. The short-run aggregate supply curve shifts left and the short-run Phillips curve shifts right.
Exhibit 2-4 Production possibilities curve data A B C D E Capital goods 0 10 20 30 40 Consumer goods200 180 140 80 0 In Exhibit 2-4, if the economy chooses production possibility D rather than production possibility B, it can expect
A. less growth in the future because it will use up its consumer goods. B. more growth in the future because of the accumulation of capital. C. the same amount of growth in the future but with a lower standard of living. D. the same amount of growth in the future but with a higher standard of living.
"Non-market-clearing" approaches to macroeconomics include
A) the original Keynesian model, but not the New Keynesian model. B) the New Keynesian model, but not the original Keynesian model. C) the original and New Keynesian models. D) neither the original nor the new Keynesian models.