Question

In: Economics

Setting the stage for the Great Moderation was a. Restrictive fiscal policy b. Low and fairly...

Setting the stage for the Great Moderation was

a. Restrictive fiscal policy

b. Low and fairly steady inflation and inflation expectations

c. Coordinated international policies

d. Strong stock prices

Solutions

Expert Solution

The answer is (b)

It is believed by many economists that the foundation for the Great Moderation was laid by the low inflation and resulting price stability and steady inflation expectations. Later reasons include structural change, less shocks etc.

All other options are wrong as they did not set the stage for the Great Moderation

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

3) Fiscal Policy a. What does fiscal policy refer to? b. How could fiscal policy affect...
3) Fiscal Policy a. What does fiscal policy refer to? b. How could fiscal policy affect AD? c. Why would a government use fiscal policy to stabilize the economy ? d. What, specifically, would they do to stabilize? e. What are some of the risks of using fiscal policy to stabilize? f. What are automatic fiscal stabilizers, and how do they affect the budget deficit/surplus?
Monetary Policy and Fiscal Policy A healthy economy typically has low rates of unemployment and steady...
Monetary Policy and Fiscal Policy A healthy economy typically has low rates of unemployment and steady prices. Low rates of unemployment means that the economy is operating at its full potential. To ensure the economy continues to operate at potential GDP (full capacity where all savings are invested in production functions, and where all those who wish to work can find a job, and all other factors of production are fully utilized in the production function), governments use fiscal and...
1. What are the political and economic limitations upon (a) fiscal policy and (b) monetary policy?...
1. What are the political and economic limitations upon (a) fiscal policy and (b) monetary policy? One of the advantages of monetary policy is its speed and flexibility, but there are limitations. Explain. 2. One of the advantages of monetary policy is its speed and flexibility, but there are limitations. Explain.
Discuss the effects of monetary and fiscal policy under the following conditions: zero, low, high capital...
Discuss the effects of monetary and fiscal policy under the following conditions: zero, low, high capital mobility; using graphs as well
a) Explain the difference between Fiscal Policy and Monetary Policy. b) What could be done using...
a) Explain the difference between Fiscal Policy and Monetary Policy. b) What could be done using Fiscal Policy during a period of high inflation? c) What could be done using Monetary Policy during a period of high inflation?
To fight a inflation a) How should the government execute Fiscal Policy? b) How should the...
To fight a inflation a) How should the government execute Fiscal Policy? b) How should the Federal Reserve Bank execute Monetary Policy? Make sure to include the appropriate graphs and analysis and how these policies each affect C,I, G, NX, AD, AS, P, Q, inflation, and economic growth.
1) Fiscal policy entails changes in A) the quantity of money. B) the MPC. C) government...
1) Fiscal policy entails changes in A) the quantity of money. B) the MPC. C) government spending and taxes. D) the multiplier. 2) If we compare the United States to France, we see that potential GDP per person in France is ________ than that in the United States because the French ________ is greater than that in the United States. A) greater; tax wedge B) less; structural deficit C) less; tax wedge D) less; MPC 3) A fiscal action that...
Answer the following questions: A- What is discretionary and non-discretionary fiscal policy? B- What are the...
Answer the following questions: A- What is discretionary and non-discretionary fiscal policy? B- What are the available tools of fiscal policy? C- What is monetary policy and who conducts it? D- What are the available tools of monetary policy? Using these introductory questions, present a detailed essay-type analysis, with all the information from a reliable source, of what consists of at least three fiscal policy incentives and one monetary policy incentive as a consequence of the COVID-19. In total, at...
To fight a inflation a) How should the government execute Fiscal Policy? b) How should the...
To fight a inflation a) How should the government execute Fiscal Policy? b) How should the Federal Reserve Bank execute Monetary Policy? Make sure to include the appropriate graphs and analysis and how these policies each affect C,I, G, NX, AD, AS, P, Q, inflation, and economic growth.
Canadian Water Policy: a) Why are Canada's water prices low in comparison to other countries? b)...
Canadian Water Policy: a) Why are Canada's water prices low in comparison to other countries? b) Is Canada's technology of water supply the same across developed countries? Why or why not? c) How are Canada's water prices determined?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT