Menu costs of inflation are costs arising from<br>
Expansionary shifts of the aggregate demand curve<br>
Despite its costs, governments typically resist eliminating inflation because<br>
According to new Keynesians, which of the following is NOT an important source of price stickiness?<br>
In the quantity theory of money demand,<br>
Which of the following best describes a price taker?<br>
Milton Friedman and Anna Schwartz found in their study of money and business cycles from the Civil War to 1960 that<br>
Demand-pull inflation results from<br>
Attempts by policymakers to keep the rate of unemployment below the natural rate of unemployment for a sustained period of time will result in<br>
The Federal Reserve pursued an expansionary monetary policy during 1964 in order to<br>
According to the Ricardian equivalence proposition,<br>
New Keynesian and new classical economists agree that<br>
Long-term inflation is principally<br>
Real business cycle analysis differs from both the new classical and the new Keynesian analyses in holding that<br>
A decrease in the willingness or ability of banks to lend has a significant impact on the economy because<br>
Which of the following central banks continues to emphasize the growth of the money supply in its conduct of monetary policy?<br>
Which of the following will NOT shift the short-run aggregate supply function?<br>
The liquidity preference theory emphasizes<br>
Which of the following is a likely causative factor in the movement of <i>M1</i> velocity during the 1980s?<br>
According to Keynes, if the interest rate on bond falls, but aggregate income doesn’t change,<br>
The existence of cost of living adjustments in many wage contracts<br>
According to the new Keynesian view, upturns and downturns in economic activity<br>
A disinflation policy that lacks credibility<br>
Which events made the inflation that began in the late 1960s worse?<br>
The tendency of individuals to hold money to pay for unexpected transactions is known as<br>
Which of the following statements is correct?<br>
Monetary neutrality refers to the fact that changes in the money supply<br>
The typical firm will find that its payoff to reducing price increases after the announcement of a disinflation policy<br>
If in the short run prices did not respond at all to changes in aggregate demand, the short-run aggregate supply curve would<br>
Keynes assumed that the return on money was<br>
If credit card companies imposed a per purchase charge for using their cards,<br>
According to New Keynesians, why does an expected change in the money supply affect output in the short run?<br>
According to Baumol and Tobin, the transactions demand for money is<br>
The book in which Milton Friedman and Anna Schwartz reported on their study of the relation between money and the business cycle is<br>
Which of the following is true of the new classical view of stabilization policy?<br>
An important distinction between Friedman’s and Keynes’ view of money demand was that<br>
Which of the following schools of thought among economists believe that activist stabilization policy is ever desirable?<br>
During the late 1970s, households, businesses, and policymakers shifted to the opinion that<br>
If oil prices fall at the same time that the federal government increases its spending, in the short run<br>
Which of the following is true of the new Keynesian view of stabilization policy?<br>
When economists state that money is neutral in the long run, they mean that in the long run,<br>
Money’s convenience yield is<br>
Most economists believe that the aggregate supply curve is<br>
The inclusion in <i>M1</i> of interest-bearing substitutes for conventional checkable deposits in the early 1980s<br>
Which of the following is the correct expression for short-run aggregate supply in the new classical view?<br>
= Y + a(P – Pe) + a(P + Pe) + a(P – Pe) = Y + a(P + Pe)
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