ec_Chapter 14 - Chapter 14 Name: _ Date: _ 1. Arguments in...

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Chapter 14 Name: __________________________ Date: _____________ 1. Arguments in favor of passive economic policy include all of the following except : A) monetary and fiscal policies work with long and variable lags, which can produce destabilizing results. B) economic forecasts have too large a margin of error to be useful in formulating stabilization policy. C) recessions do not reduce economic well-being, so using monetary and fiscal policy for stabilization is unnecessary. D) the Great Depression could have been avoided if the Federal Reserve had pursued a policy of steady money growth. 2. The time between a shock to the economy and the policy action responding to that shock is called the: A) automatic stabilizer. B) time inconsistency of policy. C) inside lag. D) outside lag. 3. The time between a policy action and its influence on the economy is called the: A) automatic stabilizer. B) time inconsistency of policy. C) inside lag. D) outside lag. 4. Advocates of passive policy argue that because monetary and fiscal policy lags are: A) short and fixed these policies should not be used to offset shocks. B) long and variable these policies should not be used to offset shocks.
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This note was uploaded on 11/28/2010 for the course ECO 2013 taught by Professor Patconroy during the Summer '08 term at Miami Dade College, Miami.

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ec_Chapter 14 - Chapter 14 Name: _ Date: _ 1. Arguments in...

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