Which of the following policy recommendations are consistent with the classical, Keynesian, monetarist, Great Moderation consensus, expansionary
Question:
Which of the following policy recommendations are consistent with the classical, Keynesian, monetarist, Great Moderation consensus, expansionary austerity, and secular stagnationist views of the macro economy?
a. Since the long-run growth of GDP is 2%, the money supply should grow at 2%.
b. Decrease government spending in order to decrease inflationary pressure.
c. Increase the money supply in order to alleviate a recessionary gap.
d. Always maintain a balanced budget.
e. Decrease the budget deficit as a percent of GDP when facing a recessionary gap.
f. Pursue large, expansionary fiscal policies during a liquidity trap.
g. Maintain a 3% to 4% inflation rate today, which is necessary to fight future recessions.
Step by Step Answer:
Macroeconomics
ISBN: 978-1319120054
3rd Canadian edition
Authors: Paul Krugman, Robin Wells, Iris Au, Jack Parkinson