Which of the Following Views Are Consistent with the Case

question 67

Multiple Choice

Which of the following views are consistent with the case for nondiscretionary macroeconomic policy?

• A)Even with time lags,discretionary policy moves the economy to full employment before the economy's self-correcting mechanism would.
• B)The wage and price adjustment process being extremely slow,a nondiscretionary policy results in a large loss of output.
• C)Workers will come to expect expansionary policies whenever the economy moves below full employment.
• D)A discretionary,accommodating policy of shifting the aggregate demand curve will produce less volatility in both the price level and output due to the short time it takes to shift aggregate demand.

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Definitions:

Coefficient Of Determination

A statistical measure represented as R², which indicates the proportion of the variance in the dependent variable that is predictable from the independent variable(s).

Least Squares Regression Line

The least squares regression line is a straight line that minimizes the sum of the squared differences between the observed values and the values predicted by the line.

Regression Analysis

A statistical technique used to model the relationship between a dependent variable and one or more independent variables.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given period.