The Great Moderation Consensus Regarding the Use of Monetary or Fiscal

question 88

Multiple Choice

The Great Moderation consensus regarding the use of monetary or fiscal policy to reduce unemployment in the long run is that:

• A) unemployment can be constantly decreased as long as expectations of inflation are kept low.
• B) the natural rate of unemployment limits what monetary and fiscal policy can accomplish.
• C) the concept of the nonaccelerating inflation rate of unemployment, or NAIRU, was a mistake.
• D) the only effective policy is to maintain a constant growth rate of the money supply.

---

Definitions:

Ordinary Shares

Equity securities that represent ownership in a company, giving holders voting rights and a share in the company's profits through dividends.

Cumulative

Referring to a total that increases by adding successive amounts.