Which aspects, if any, of monetarist or rational expectations theory have been integrated into mainstream macroeconomics?
What will be an ideal response?
Mainstream economists today largely accept the monetarist position that the money supply is an important variable affecting economic activity and that excessive growth over a long period of time can be inflationary. The notion of “crowding out” of private investment has been recognized as a weakness of expansionary fiscal policy without coordinated monetary policy. Finally, policy makers have become much more sensitive to expectations and the interaction of policy with particular markets in the macro economy.
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The opportunity cost of producing one more unit of a good or service is the
A) marginal cost. B) marginal benefit. C) efficient level of production. D) market outcome. E) price of the good or service.
According to the 1790 census, the majority of whites had links to
(a) the British Isles, thus explaining why British institutions were selected to guide development and growth in the colonies. (b) Germany, thus explaining why German institutions were selected to guide development and growth in the colonies. (c) Spain, thus explaining why Spanish institutions were selected to guide development and growth in the colonies. (d) Madagascar and Zanzibar, thus explaining why institutions from Madagascar and Zanzibar were selected to guide development and growth in the colonies.
A Texas household receives a Social Security check for $1500, which it uses to purchase a $40 pair of shoes made in Thailand by a Thai firm, a $1240 television made by a Korean firm in Korea, and $220 on groceries from a local store. As a result, U.S. GDP
a. increases by $40. b. increases by $220. c. increases by $280. d. increases by $1500.
A reverse repurchase agreement will accomplish all of the following to banks and other financial intermediaries EXCEPT:
A. discourage investment elsewhere. B. ensure their solvency. C. give them a higher rate of return on T-Bill holdings. D. drain them of liquid cash.