Economic Analysis Suggests That Countercyclical Macro-Policy Will

question 56

Multiple Choice

Economic analysis suggests that countercyclical macro-policy will

• A) be difficult to time properly because of uncertainty about the future direction of the economy.
• B) be difficult to implement because we do not know whether monetary policy is transmitted through the interest rate, or whether it affects aggregate demand directly.
• C) reduce the natural rate of unemployment when macro-policy is persistently expansionary.
• D) help reduce economic instability if, and only if, we are willing to tolerate double-digit inflation.

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Definitions:

Owner's Equity

Owner's Equity refers to the owner's rights to the assets of the company after all liabilities have been deducted. It is also known as shareholders' equity or stockholders' equity.

Investments

Investments refer to assets or items acquired with the intention of generating income or appreciating in the future.

Trial Balance Totals

The cumulative sum of all debits and credits in a trial balance, which should equal to ensure the ledger is balanced.

Normal Balances

The side (debit or credit) of an account that is expected to have a positive balance.