Given the Uncertainty About the Effects of Macro Policy, Economists

question 28

Multiple Choice

Given the uncertainty about the effects of macro policy, economists generally propose that:

• A) macro policies should be more active, the lower the level of unemployment or inflation.
• B) money growth should be set at zero by constitutional amendment.
• C) changes in money growth should only be used for fine tuning the economy, not for correcting large imbalances (such as high inflation).
• D) policymakers should stop well short of fine tuning.
• E) elected officials should have more input in the determination of monetary policy.

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Definitions:

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, often used in the time value of money calculations.

Growth Opportunities

Potential situations or initiatives that could lead to business expansion, including new markets, products, or services.

Expected Rate

The anticipated return on an investment over a specific period, often based on historical data and analysis of market conditions.

Constant-Growth Rate

A growth rate applied continuously and at a constant percentage, often used in the dividend discount model to value stocks.