In Recent Years, Economists Holding Monetarist Views Have Replaced Their

question 196

Multiple Choice

In recent years, economists holding monetarist views have replaced their call for a monetary rule with a call for

• A)artful Fed management of interest rates.
• B)inflation targeting.
• C)nominal GDP targeting.
• D)inflationary and recessionary gap analysis.

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Definitions:

Inflation Rate

An upward movement in the overall price level of goods and services in an economy over time.

Aggregate Demand

Aggregate request for products and services in an economy, measured at a particular general price level throughout a defined time interval.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, reflecting inflation or deflation.

Short-Run Aggregate Supply

A curve that shows the relationship in the short term between the price level and the quantity of output provided by firms when some input prices, especially wages, are fixed.