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Mainstream economics views monetary policy as:
A: Source of instability, similar to the view of monetarism

B: Stability factor, similar to the view of monetarism


C: Source of instability, while monetarism views it as a stabilizing factor

D: Stabilizing factor, while monetarism views it as a source of instability.

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Paramjeet Chawla
Paramjeet ChawlaLv8
28 Sep 2020
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Related questions

Why is who holds the debt an important factor when comparing debt-to-GDP ratios among countries?

A. Lower levels of external debt create higher interest rates.

B. Lower levels of external debt create a greater threat of global instability.

C. Higher levels of external debt create a greater threat of global instability.

D. Higher levels of external debt create a lower threat of global instability

10. The monetarist program undertaken during the 1979-1982 period resulted in:

A. a reduction in the inertial rate of inflation.

B. a dramatic rise in unemployment.

C. very high-interest rates.

D. all of the above.

E. none of the above.

 

11. Some economists have suggested replacing the emphasis on controlled money supply as found in monetarism with controlled growth in nominal GDP. Money supply targets, then:

A. would be determined so as to attain the desired nominal GDP level.

B. would be eliminated.

C. could be set arbitrarily.

D. would be settled on following the discovery of an acceptable level of unemployment.

E. all of the above are true.

 

12. Which of the following is NOT a keystone of monetarism?

A, The money supply is the determinant of nominal GDP growth.

B. Fiscal policy can raise interest rates and thereby raise velocity.

C. Prices and wages are relatively stable.

D.The private sector is relatively stable.

E. All of the above are keystones.

 

13. It follows from the assumptions of the rational-expectations macroeconomics that:

A. most unemployment is voluntary.

B. monetary policy can work in the short run but not in the long run.

C. fiscal policy is hamstrung because of delays in the legislative process in Congress.

D. all policy that is predictable will be undone by clever citizens.

E. all are true.

 

14. Which of the following is true according to monetarist theory?

A. The IS curve is quite steep while the LM Curve is relatively flat.

B. Changes in the money supply have their greatest effect on prices.

C. Fiscal policy can do little to improve economic conditions, but much to worsen them.

D. Real GDP stays at or near potential output most of the time.

E. All of the above are true.

a) State, compare and contrast policy suggestions by the Keynesian School and the Monetarist School to reduce problem of macroeconomic instability and unemployment in a market capitalist economy.

b) For each of these schools, provide and discuss one specific example (including the time period) from the U.S. economic history in which the theories were adopted as government policies and helped reduce instability in the economy. Be specific about your example, explain the policy that was implemented using tools of monetary and fiscal policy that we cover in class.

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