The Great Moderation Consensus Regarding the Use of Monetary Policy

question 113

Multiple Choice

The Great Moderation consensus regarding the use of monetary policy to fight recessions is that expansionary monetary policy:

• A) is ineffective because the public expects it.
• B) is harmful because it only increases the aggregate price level.
• C) has little impact on aggregate demand because of liquidity traps.
• D) can be used to increase aggregate demand but at the cost of higher aggregate prices.

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Definitions:

Henry Luce

An influential American magazine magnate who co-founded and headed Time Inc., which published several major magazines including Time, Life, Fortune, and Sports Illustrated.

Black Internationalism

A political and social movement that advocates for the solidarity and connectivity of black people globally against racism, colonialism, and imperialism.

Saturday Evening Post

A longstanding American magazine that began publication in 1821, known for its journalism, fiction, and illustrations.

Carlos Bulosan

was a Filipino American author best known for his 1946 autobiography, "America Is in the Heart," depicting the Filipino immigrant experience.