chapter 34 macro - Chapter 34 18 Limits to Stabilization...

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Chapter 34 / 18 Limits to Stabilization Policy CM34 \ D \\ Laws and Regulations \ 2 \\ The Employment Act of 1946 did not identify as a national macroeconomic priority: (a) maximum employment. (b) maximum purchasing power. (c) maximum economic growth. (d) maximum economic efficiency. CM34 \ B \\ Biography: Friedrich Hayek \ 1 \\ Friedrich Hayek condemned political leaders who try to reshape society to conform to their own idealized models as practitioners of: (a) reindustrialization. (b) constructivism. (c) budget management. (d) divine intervention. (e) financial insulation. CM34 \ A \\ History: Keynesian Theory \ 1 \\ Attempts to understand and cure worldwide depression resulted most directly in the development of: (a) Keynesian theory. (b) modern monetarism. (c) supply-side economics. (d) classical economic theory. (e) rational expectations theory. CM34 \ B \\ Discretionary Policies \ 2 \ Discretionary monetary and fiscal policies are examples of: (a) industrial policy. (b) demand management policies. (c) supply management policies. (d) incomes policies. Ralph Byrns Chapter 34 / 18 : Limits to Stabilization Policy Test Bank Three 1
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Macroeconomic policy goals are difficult to accomplish because of: (a) conflicting social goals. (b) difficulties in data collection and forecasting. (c) political considerations. (d) lack of knowledge on proper theory and timing. (e) All of the above. CM34 \ B \\ Macroeconomic Policy: Fine-tuning \ 3 \\ The case for fine-tuning as a macropolicy strategy is weakened by: (a) “sticky” prices and wages. (b) deficiencies in economic forecasting. (c) Keynesian theory. (d) regularities in cyclic swings. CM34 \ D \\ Discretionary Macroeconomic Policies \ 3 \ Domestic monetary and fiscal policies tend to be weakened to the extent that a country: (a) relies on markets to set relative prices and incomes. (b) produces technologically advanced output and has a well-developed infrastructure. (c) has citizens who save more and consume less than do people in other countries. (d) relies heavily on international trade for a significant part of its GDP. CM34 \ D \\ Lags in Public Policies \ 2 \ If unemployment began rising substantially in June 2007, it might NOT be good policy to increase government spending and money growth in May 2008 because: (a) such policies would tend to increase unemployment further. (b) there would likely be substantial crowding-out. (c) incumbents could suffer disaster in the 2008 elections. (d) by the time the policies affected the economy, a cyclical upturn could start. CM34 \ E \\ Recognition Lag \ 2 \\ Macroeconomic problems are clearly identified only after: (a) a deliberation lag. (b) an administrative lag.
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chapter 34 macro - Chapter 34 18 Limits to Stabilization...

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