41) The flatter the IS curve,
A) the more effective monetary : 1940427
41) The flatter is the IS curve,
A) the more effective is monetary policy.
B) the less effective is monetary policy.
C) the effectiveness of monetary policy does not change.
D) a given change in the money supply will have a smaller effect on output.
42) As the IS curve becomes steeper, we know that
A) a given change in the money supply will cause a larger change in output.
B) a given change in the money supply will cause a smaller change in output.
C) a given change in the money supply will cause the same change in output.
D) monetary policy becomes more effective.
43) The less staggered are labor contracts,
A) the more rapidly the economy will adjust to changes in aggregate demand.
B) the less rapidly the economy will adjust to changes in aggregate demand.
C) the greater the inflationary effects of a given change in money growth in the medium run.
D) the less inflationary effects of a given change in money growth in the medium run.
44) The crisis reflects a major intellectual failure of macroeconomics to understand the macroeconomic importance of
A) financial system.
45) Work by Doug Diamond and Philip Dybvig in the 1980s had clarified the nature of
B) bank runs.
46) Economist ________ shows the "limits of arbitrage."
A) Doug Diamond
B) Andrei Shleifer
C) Philip Dybvig
D) Richard Thaler
47) The Great Depression had led economists to suggest a larger role for
A) market mechanism.
B) government intervention.
C) price mechanism.
D) international trade.
48) Both the new classical and new Keynesian models had in common the belief that
A) in the medium run, output returns to its natural level.
B) output is always at its natural level.
C) in the short run, output would likely deviate from its natural level.
D) none of the above
49) The main debate during the 1960s was
A) between Keynesians and classicals.
B) between new Keynesians and new classicals.
C) between Keynesians and monetarists.
D) between new Keynesians and monetarists.
50) The intellectual leader of new classicals is
A) Edward Prescott.
B) John Taylor.
C) Stanley Fischer.
D) Ben Bernanke.