Questions from Macroeconomics


Q: Why does the divine coincidence simplify the job of policy making?

Why does the divine coincidence simplify the job of policy making? In what situations will it prevail? Why?

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Q: Summarize the main points of disagreement in the debate between activists and

Summarize the main points of disagreement in the debate between activists and non activists.

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Q: Why do activists believe the economy’s self-correcting mechanism is slow

Why do activists believe the economy’s self-correcting mechanism is slow?

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Q: Describe the five time lags involved in implementing stabilization policy.

Describe the five time lags involved in implementing stabilization policy.

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Q: How does the Taylor rule relate to the monetary policy curve?

How does the Taylor rule relate to the monetary policy curve?

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Q: Would it be a good idea for monetary policy makers to set

Would it be a good idea for monetary policy makers to set the federal funds rate solely using the Taylor rule?

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Q: How can the monetary authorities target any inflation rate they want?

How can the monetary authorities target any inflation rate they want?

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Q: Explain the processes of cost-push and demand-pull inflation

Explain the processes of cost-push and demand-pull inflation. How do macroeconomists distinguish between the two?

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Q: How does the policy rate hitting a floor of zero lead to

How does the policy rate hitting a floor of zero lead to an upward-sloping aggregate demand curve?

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Q: Using Table 8.1 (NBER business cycles), identify the

Using Table 8.1 (NBER business cycles), identify the longest and shortest expansion and contraction in the United States from Table 8.1:

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