Answer to Question #214167 in Macroeconomics for EBI

Question

1. Which of the monetary policy propositions of different models are given below correctly? 

I- Similar to the early Keynesians, Modern Keynesians also believe that monetary policy should be actively adjusted to offset shocks to the economy. 

II- As their name suggests, monetarists believe that changes in the quantity of money are the dominant influence on changes in nominal income. Thus, according to the monetarists, monetary policy should be determined by discretion of policymakers, not by any rule.

a.

I only

b.

none of them

c.

II only.

2.Theory of the natural rates of unemployment and output has been firstly proposed by ……………….

a.

Lucas R.

b.

Friedman M.

c.

Keynes J.M.

d.

Smith A.

3.Which of the following models view mostly the changes in real supply-side factors as determinants of short-run fluctuations in output and employment?

a.

Keynesian models

b.

Real business cycle models

c.

New Keynesian models

d.

New classical models

Answer 1

Q1.

a.

I only.

Q2.

b.

Friedman M.

Q3.

b.

Real business cycle models