Recall the Application. When applying the Taylor Rule to the decade of 2000, economist John Taylor found that past experience showed that from 2001 to 2004, the Fed should have ________ interest rates instead of ________ interest rates
A) raised; not changing B) not changed; lowering
C) lowered; raising D) raised; lowering
D
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Unexpected and large deflation is desirable, according to the Friedman rule
a. True b. False Indicate whether the statement is true or false
A decrease in aggregate demand and the subsequent cutbacks in production lead to:
A. frictional unemployment. B. cyclical unemployment. C. cost-push unemployment. D. structural unemployment.
Suppose there is a simultaneous reduction in the expected future interest rate and increase in future expected output. This will cause which of the following to occur?
A) the IS curve to shift left in the current period B) the IS curve to shift right in the current period C) the LM curve to shift up in the current period D) the LM curve to shift down in the current period E) an ambiguous effect on the position of the IS curve in the current period
Which of the following macroeconomic variables is acyclical?
A. Money supply B. Real interest rates C. Consumption D. Unemployment