budget balance - Cyclically Adjusted Budget Balance Fiscal Year Public Debt Debt-GDP Ratio Implicit Liabilities Module 31 Target Federal Funds Rate

budget balance - Cyclically Adjusted Budget Balance Fiscal...

This preview shows page 1 - 2 out of 2 pages.

Cyclically Adjusted Budget Balance Fiscal Year Public Debt Debt-GDP Ratio Implicit Liabilities Module 31 Target Federal Funds Rate Expansionary Monetary Policy Contractionary Monetary Policy Taylor Rule Inflation Targeting Module 32 Monetary Neutrality Module 33 Classical Model of the Price Level Inflation Tax Cost-Push Inflation Demand-Pull Inflation Module 34 Short-Run Phillips Curve Nonaccelerating Inflation Rate of Unemployment (NAIRU) Long-Run Phillips Curve Debt Deflation Zero Bound Liquidity Trap Module 35 Monetarism Discretionary Monetary Policy Monetary Policy Rule Quantity Theory of Money Velocity of Money Natural Rate Hypothesis New Classical Macroeconomics Rational Expectations New Keynesian Economics Real Business Cycle Theory 1.Why is the cyclically adjusted budget balance a better measure of the long-run sustainability of government policies than the actual budget balance?2.Suppose the economy is in a slump and the current public debt is quite large. Explain the trade-off of short-run versus long-run objectives that policy makers face when deciding whether or not to engage in deficit spending.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture