Which of the Following Models Emphasizes the Importance of Credible

question 4

Multiple Choice

Which of the following models emphasizes the importance of credible, predictable government policies for maintaining full employment with low inflation?

• A) the monetarist model
• B) the Keynesian model
• C) the supply-side model
• D) the rational expectations model

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Definitions:

Supply Of Loanable Funds

The total amount of funds available for borrowing in the financial markets, determined by savings and the monetary policy.

Open-Economy Macroeconomic Model

A framework for analyzing economies that engage in international trade, considering the impact of exchanges between domestic and foreign markets.

Trade Policies

Trade policies comprise laws and regulations governing international trade, including tariffs, trade agreements, and import/export controls, to protect domestic industries and manage economic relationships.

Trade Balance

The value of a nation’s exports minus the value of its imports; also called net exports.