Mod 36_ The Modern Macroeconomic Consensus - Mod 36 The Modern Macroeconomic Consensus Five Key Questions About Macroeconomic Policy Classical

Mod 36_ The Modern Macroeconomic Consensus - Mod 36...

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Mod 36: The Modern Macroeconomic Consensus Five Key Questions About Macroeconomic Policy Classical Macroeconomists Keynesian Macroeconomists Monetarism Modern Consensus Is expansionary monetary policy helpful in fighting recessions? No Not Very Yes Yes, except in special circumstances Is expansionary fiscal policy helpful in fighting recessions? No Yes No Yes Can monetary and/or fiscal policy reduce unemploymen t in the long run? No Yes No No Should fiscal policy be used in a discretionary way? No Yes No No, except in special circumstances Should monetary policy be used in a discretionary way? No Yes No Still in Dispute
Mod 36: Tackle the Test 1.Which of the following is an example of an opinion on which economists have reached a broad consensus?i.The natural rate hypothesis holds trueii.Discretionary fiscal policy is usually counterproductiveiii.Monetary policy is effective, especially in a liquidity trap a.I onlyb.II onlyc.III onlyd.I and II onlye.I, II, and III

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