Question 1

The objective of supply-side economics is to ____________.The problem,said the supply-siders,was that ___________ were hurting the incentive to work and invest.

Accepted Answer

raise aggr...

Question 2

According to the crude quantity theory of money,if P rose by 20%,then _________.

Accepted Answer

The answer of According to the crude quantity theory of...

Question 3

The three main goals of macropolicy are (1)________________; (2)________________;and (3)_____________.

Accepted Answer

stable prices;low un...

Question 4

Who said this? "International capital flows have made it much more difficult for the central bank to plot the nation's monetary course."

Accepted Answer

A)  Marc Levinson
B)  John Maynard Keynes
C)  Milton Friedman
D)  Adam Smith
E)  John Kenneth GalbraithF) A) and B)
G) A) and C)

Question 5

According to Keynes,the main institutional barriers to downward wage and price flexibility were (1)_________________ and (2)___________________.

Accepted Answer

strong labor unions;...

Question 6

The rational expectations theorists have taken up two key items on the conservative economists' agenda: (1)_________ and (2)___________.

Accepted Answer

the moneta...

Question 7

According to the rational expectationists,

Accepted Answer

A)  individuals and business firms quickly anticipate government policy.
B)  even if there were a recession or substantial inflation,the best government policy would be to do nothing.
C)  the dramatic oil price shocks of 1973 and 1979 created declines in aggregate supply,lowering the natural level of real GDP.
D)  at best,government anti-recessionary policies would have no effect whatsoever.
E)  All of the choices agree with the thought of rational expectationists.F) C) and D)
G) A) and B)

Question 8

During inflationary recessions

Accepted Answer

A)  both conventional monetary and fiscal policy would work.
B)  neither conventional monetary nor fiscal policy would work.
C)  conventional monetary policy would work,but conventional fiscal policy would not work.
D)  conventional fiscal policy would work,but conventional monetary policy would not work.E) B) and C)
F) B) and D)

Question 9

Which of the following statements are true?

Accepted Answer

A)  Big government was ushered in during the 1920s.
B)  Keynes believed budget deficits were good for the economy all the time.
C)  The classical economists believed recessions were hard to end without government intervention.
D)  Classical economics lost most of its popularity in the 1930s.E) A) and C)
F) All of the above

Question 10

The _________ hypothesis is based on the assumption that the best indicator of the future is what has happened in the past.

Accepted Answer

adaptive e...

Question 11

The behaviorist economists believe that economic behavior is guided by _________ and ________.

Accepted Answer

rational s...

Question 12

Which one of the following statements is incorrect?

Accepted Answer

A)  Policy activists believe in the use of fiscal and monetary policies to combat inflation and unemployment.
B)  Monetarists are policy activists.
C)  Keynesians are policy activists.
D)  New classical economists are non-interventionists.
E)  Non-interventionists believe that discretionary fiscal and monetary policies are destabilizing.F) B) and C)
G) A) and C)

Question 13

If people take into account the expected behavior of fiscal and monetary authorities in forecasting the behavior of inflation rates,they are most likely forming their projections using

Accepted Answer

A)  behavioral expectations.
B)  adaptive expectations.
C)  contractionary expectations.
D)  inflationary expectations.
E)  rational expectations.F) All of the above
G) A) and D)

Question 14

Who said "The ideas of economists and political philosophers,both when they are right and when they are wrong,are more powerful than is commonly understood.Indeed,the world is ruled by little else.Practical men,who believe themselves to be quite exempt from any intellectual influences,are usually slaves of some defunct economist."

Accepted Answer

A)  Adam Smith
B)  Karl Marx
C)  John Maynard Keynes
D)  John Stuart Mill
E)  George Bernard ShawF) C) and D)
G) B) and D)

Question 15

The Laffer curve supports a basic contention of the ___________ school.

Accepted Answer

The answer of The Laffer curve supports a basic contention...

Question 16

With the internationalization of our economy,the Federal Reserve has had a much more difficult time conducting monetary policy because of ________________.

Accepted Answer

internatio...

Question 17

In comparing monetarism and rational expectations theory we find that

Accepted Answer

A)  both favor policy rules and for the same reasons.
B)  both favor policy rules,but for different reasons.
C)  both favor discretionary policies.
D)  the former favors discretionary policy,while the latter favors policy rules.
E)  the former favors policy rules,while the latter favors discretionary policy.F) None of the above
G) All of the above

Question 18

According to the Laffer curve,when very low marginal tax rates are lowered,tax revenue will

Accepted Answer

A)  decline.
B)  stay the same.
C)  increase slightly.
D)  increase substantially.E) A) and B)
F) C) and D)

Question 19

The monetarists believe that an increase in the money supply of about 4% per year,regardless of economic conditions,is a good monetary policy.Why was 4% chosen?

Accepted Answer

A)  It reflects the fact that the output of the economy has been growing at about 3 to 4% per year,and a 4% increase in the money supply would tend to stabilize the price level.
B)  By equating the money supply growth rate and the unemployment rate,the monetarists believe that the output of the economy will increase.
C)  By restricting the increase in money supply to 4%,the monetarists hope to limit fluctuations in the price trend to 4% and stabilize velocity.
D)  Price fluctuations have been shown to be historically more than 4%.By a steady 4% increase in the money supply,the monetarists hope to drive prices down.E) B) and D)
F) All of the above

Question 20

Non-interventionists include all of the following,except

Accepted Answer

A)  new classical economists.
B)  supply-side economists.
C)  Keynesian economists.
D)  monetarists.
E)  rational expectationists.F) C) and D)
G) A) and B)

Exam 15: A Century of Economic Theory

The behaviorist economists believe that economic behavior is guided by _ and .

Correct Answer
verified
rational s...
View Answer

Correct Answer
verified

In comparing monetarism and rational expectations theory we find that

Correct Answer
verified

The monetarists believe that an increase in the money supply of about 4% per year,regardless of economic conditions,is a good monetary policy.Why was 4% chosen?

Correct Answer
verified

According to Keynes,the main institutional barriers to downward wage and price flexibility were (1)_ and (2)___.

Correct Answer
verified
strong labor unions;...
View Answer

Which one of the following statements is incorrect?

Correct Answer
verified

With the internationalization of our economy,the Federal Reserve has had a much more difficult time conducting monetary policy because of ________________.

Correct Answer
verified
internatio...
View Answer

According to the crude quantity theory of money,if P rose by 20%,then _________.

Correct Answer
verified

If people take into account the expected behavior of fiscal and monetary authorities in forecasting the behavior of inflation rates,they are most likely forming their projections using

Correct Answer
verified

The objective of supply-side economics is to __.The problem,said the supply-siders,was that _ were hurting the incentive to work and invest.

Correct Answer
verified
raise aggr...
View Answer

The Laffer curve supports a basic contention of the ___________ school.

Correct Answer
verified

The three main goals of macropolicy are (1)____; (2);and (3)_.

Correct Answer
verified
stable prices;low un...
View Answer

According to the Laffer curve,when very low marginal tax rates are lowered,tax revenue will

Correct Answer
verified

The rational expectations theorists have taken up two key items on the conservative economists' agenda: (1)_ and (2)___.

Correct Answer
verified
the moneta...
View Answer

During inflationary recessions

Correct Answer
verified

According to the rational expectationists,

Correct Answer
verified

The _________ hypothesis is based on the assumption that the best indicator of the future is what has happened in the past.

Correct Answer
verified
adaptive e...
View Answer

Which of the following statements are true?

Correct Answer
verified

Non-interventionists include all of the following,except

Correct Answer
verified

Who said this? "International capital flows have made it much more difficult for the central bank to plot the nation's monetary course."

Correct Answer
verified

Exam 15: A Century of Economic Theory

The behaviorist economists believe that economic behavior is guided by _________ and ________.

Correct Answerverifiedrational s...View AnswerShow Answer

Correct AnswerverifiedShow Answer

In comparing monetarism and rational expectations theory we find that

Correct AnswerverifiedShow Answer

The monetarists believe that an increase in the money supply of about 4% per year,regardless of economic conditions,is a good monetary policy.Why was 4% chosen?

Correct AnswerverifiedShow Answer

According to Keynes,the main institutional barriers to downward wage and price flexibility were (1)_________________ and (2)___________________.

Correct Answerverifiedstrong labor unions;...View AnswerShow Answer

Which one of the following statements is incorrect?

Correct AnswerverifiedShow Answer

With the internationalization of our economy,the Federal Reserve has had a much more difficult time conducting monetary policy because of ________________.

Correct Answerverifiedinternatio...View AnswerShow Answer

According to the crude quantity theory of money,if P rose by 20%,then _________.

Correct AnswerverifiedShow Answer

If people take into account the expected behavior of fiscal and monetary authorities in forecasting the behavior of inflation rates,they are most likely forming their projections using

Correct AnswerverifiedShow Answer

The objective of supply-side economics is to ____________.The problem,said the supply-siders,was that ___________ were hurting the incentive to work and invest.

Correct Answerverifiedraise aggr...View AnswerShow Answer

The Laffer curve supports a basic contention of the ___________ school.

Correct AnswerverifiedShow Answer

The three main goals of macropolicy are (1)________________; (2)________________;and (3)_____________.

Correct Answerverifiedstable prices;low un...View AnswerShow Answer

According to the Laffer curve,when very low marginal tax rates are lowered,tax revenue will

Correct AnswerverifiedShow Answer

The rational expectations theorists have taken up two key items on the conservative economists' agenda: (1)_________ and (2)___________.

Correct Answerverifiedthe moneta...View AnswerShow Answer

During inflationary recessions

Correct AnswerverifiedShow Answer

According to the rational expectationists,

Correct AnswerverifiedShow Answer

The _________ hypothesis is based on the assumption that the best indicator of the future is what has happened in the past.

Correct Answerverifiedadaptive e...View AnswerShow Answer

Which of the following statements are true?

Correct AnswerverifiedShow Answer

Non-interventionists include all of the following,except

Correct AnswerverifiedShow Answer

Who said this? "International capital flows have made it much more difficult for the central bank to plot the nation's monetary course."

Correct AnswerverifiedShow Answer

The behaviorist economists believe that economic behavior is guided by _ and .

Correct Answer
verified
rational s...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

According to Keynes,the main institutional barriers to downward wage and price flexibility were (1)_ and (2)___.

Correct Answer
verified
strong labor unions;...
View Answer

Correct Answer
verified

Correct Answer
verified
internatio...
View Answer

Correct Answer
verified

Correct Answer
verified

The objective of supply-side economics is to __.The problem,said the supply-siders,was that _ were hurting the incentive to work and invest.

Correct Answer
verified
raise aggr...
View Answer

Correct Answer
verified

The three main goals of macropolicy are (1)____; (2);and (3)_.

Correct Answer
verified
stable prices;low un...
View Answer

Correct Answer
verified

The rational expectations theorists have taken up two key items on the conservative economists' agenda: (1)_ and (2)___.

Correct Answer
verified
the moneta...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
adaptive e...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified