Log in
Economics
1
answer
0
watching
75
views

Discuss the basis for and the elements of the Monetarist theory of macroeconomics.
 
Distinguish between the Monetarist and Keynesian approaches to changes in the growth rate of the money supply in response to changes in the business cycle.
 
Discuss the New classical Theory of the Real Business Cycle model specifying how the model explains changes in the business cycle.

Watch
1
answer
0
watching
75
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Joshua Stredder
Joshua StredderLv10
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Compare and contrast the recommendations for appropriate action of the monetarist theory and the classical model. Be sure your response is stated in terms of the relevant principles of both theories. Specifically relate to the similarities and differences between the recommendations of monetarist and classical theories for stimulating an economy out of a recession.

 Macroeconomics: Events and Ideas

a) The economy is under inflationary pressure. The head of the President's Council of Economic Advisers is a staunch Keynesian. Will this Keynesian recommend or not recommend? Explain.

b) Prior to the 1930s, classical economics was the predominant theory about the behavior of the aggregate price level, aggregate output, and the appropriate role of monetary policy. Describe how classical economists believed the economy would be affected by an increase in the money supply.

c) Explain the rational expectations theory and how it predicts the usefulness of fiscal and monetary policy.

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.

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in