the economics of money, banking, and financial markets

827 $

© 2014 Pearson Canada Inc.$

21. 
    

    Advocates of nondiscretionary policy contend that a discretionary policy of shifting the
    aggregate ____ curve will be costly because it produces ____ volatility in both the
    price level and output.
    A) supply; less
    B) supply; more
    C) demand; less
    D) demand; more
    Answer: D
    Diff: 2 Type: MC Page Ref: 627
    Skill: Recall
    Objective List: 26.2 Characterize the discretionary versus nondiscretionary and rules versus
    discretion policy debates

    
    


22. 
    

    Some economists contend that a policy of shifting the aggregate demand curve will be costly
    because it produces more volatility in both the price level and output. These economists likely
    are advocates of ____ policy.
    A) supply-side
    B) discretionary
    C) demand-management
    D) nondiscretionary
    Answer: D
    Diff: 2 Type: MC Page Ref: 627
    Skill: Recall
    Objective List: 26.2 Characterize the discretionary versus nondiscretionary and rules versus
    discretion policy debates

    
    


23. 
    

    The existence of lags prevents the instantaneous adjustment of the economy to policies
    changing aggregate demand, thereby strengthening the case for ____ policy.
    A) supply-side
    B) nondiscretionary
    C) discretionary
    D) demand-management
    Answer: B
    Diff: 2 Type: MC Page Ref: 627
    Skill: Recall
    Objective List: 26.2 Characterize the discretionary versus nondiscretionary and rules versus
    discretion policy debates