RecallEasyPolicy Uncertainty

Across different macroeconometric models of the U.S. economy, economists find broad qualitative agreement on which of the following outcomes?

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Why

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While macroeconomic forecasting models differ widely in their quantitative estimates over time, they qualitatively agree that monetary expansions stimulate output in the short run.

A: why it's wrongVirtually all major macroeconomic models agree that an expansionary monetary policy shock stimulates economic activity and raises output in the short run.

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Not quite. A is correct.

While macroeconomic forecasting models differ widely in their quantitative estimates over time, they qualitatively agree that monetary expansions stimulate output in the short run.

A: why it's wrongVirtually all major macroeconomic models agree that an expansionary monetary policy shock stimulates economic activity and raises output in the short run.

B: why it's wrongModels diverge significantly regarding the quantitative size and persistence of policy effects over multi-year horizons.

Tap any option to see why it's right or wrong.

Not quite. A is correct.

While macroeconomic forecasting models differ widely in their quantitative estimates over time, they qualitatively agree that monetary expansions stimulate output in the short run.

A: why it's wrongVirtually all major macroeconomic models agree that an expansionary monetary policy shock stimulates economic activity and raises output in the short run.

C: why it's wrongExpansionary monetary policy increases aggregate demand and output in the short run rather than decreasing it.

Tap any option to see why it's right or wrong.

Not quite. A is correct.

While macroeconomic forecasting models differ widely in their quantitative estimates over time, they qualitatively agree that monetary expansions stimulate output in the short run.

A: why it's wrongVirtually all major macroeconomic models agree that an expansionary monetary policy shock stimulates economic activity and raises output in the short run.

D: why it's wrongIn standard models, money is neutral in the long run, affecting the price level rather than depressing potential output.

Tap any option to see why it's right or wrong.

Not quite. A is correct.

While macroeconomic forecasting models differ widely in their quantitative estimates over time, they qualitatively agree that monetary expansions stimulate output in the short run.

B: why it's wrongModels diverge significantly regarding the quantitative size and persistence of policy effects over multi-year horizons.

C: why it's wrongExpansionary monetary policy increases aggregate demand and output in the short run rather than decreasing it.

Tap any option to see why it's right or wrong.

Not quite. A is correct.

While macroeconomic forecasting models differ widely in their quantitative estimates over time, they qualitatively agree that monetary expansions stimulate output in the short run.

B: why it's wrongModels diverge significantly regarding the quantitative size and persistence of policy effects over multi-year horizons.

D: why it's wrongIn standard models, money is neutral in the long run, affecting the price level rather than depressing potential output.

Tap any option to see why it's right or wrong.

Not quite. A is correct.

While macroeconomic forecasting models differ widely in their quantitative estimates over time, they qualitatively agree that monetary expansions stimulate output in the short run.

C: why it's wrongExpansionary monetary policy increases aggregate demand and output in the short run rather than decreasing it.

D: why it's wrongIn standard models, money is neutral in the long run, affecting the price level rather than depressing potential output.

Tap any option to see why it's right or wrong.

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RecallMediumFiscal Policy and Rules

In 1994, the U.S. House Republican leadership presented their legislative agenda titled the "Contract with America." Which of the following fiscal reforms was included in this proposal?

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Why

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The 1994 Contract with America included provisions for a balanced budget amendment and granting the president a line-item veto to curb government expenditures.

A: why it's wrongThe Contract with America explicitly called for giving the president line-item veto authority to reduce deficit spending.

B: why it's wrongThe PAYGO rule was introduced in the Budget Enforcement Act of 1990 under President George H.W. Bush, not the 1994 Contract with America.

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Not quite. A is correct.

The 1994 Contract with America included provisions for a balanced budget amendment and granting the president a line-item veto to curb government expenditures.

A: why it's wrongThe Contract with America explicitly called for giving the president line-item veto authority to reduce deficit spending.

C: why it's wrongThe Contract with America focused primarily on fiscal measures, tax cuts, and congressional procedures, not limiting the Fed's short-run monetary policy tools.

Tap any option to see why it's right or wrong.

Not quite. A is correct.

The 1994 Contract with America included provisions for a balanced budget amendment and granting the president a line-item veto to curb government expenditures.

A: why it's wrongThe Contract with America explicitly called for giving the president line-item veto authority to reduce deficit spending.

D: why it's wrongThe plan focused on domestic fiscal discipline and balanced budget constitutional amendments, not expanding central bank statutory autonomy.

Tap any option to see why it's right or wrong.

Not quite. A is correct.

The 1994 Contract with America included provisions for a balanced budget amendment and granting the president a line-item veto to curb government expenditures.

B: why it's wrongThe PAYGO rule was introduced in the Budget Enforcement Act of 1990 under President George H.W. Bush, not the 1994 Contract with America.

C: why it's wrongThe Contract with America focused primarily on fiscal measures, tax cuts, and congressional procedures, not limiting the Fed's short-run monetary policy tools.

Tap any option to see why it's right or wrong.

Not quite. A is correct.

The 1994 Contract with America included provisions for a balanced budget amendment and granting the president a line-item veto to curb government expenditures.

B: why it's wrongThe PAYGO rule was introduced in the Budget Enforcement Act of 1990 under President George H.W. Bush, not the 1994 Contract with America.

D: why it's wrongThe plan focused on domestic fiscal discipline and balanced budget constitutional amendments, not expanding central bank statutory autonomy.

Tap any option to see why it's right or wrong.

Not quite. A is correct.

The 1994 Contract with America included provisions for a balanced budget amendment and granting the president a line-item veto to curb government expenditures.

C: why it's wrongThe Contract with America focused primarily on fiscal measures, tax cuts, and congressional procedures, not limiting the Fed's short-run monetary policy tools.

Tap any option to see why it's right or wrong.

Not quite. A is correct.

The 1994 Contract with America included provisions for a balanced budget amendment and granting the president a line-item veto to curb government expenditures.

C: why it's wrongThe Contract with America focused primarily on fiscal measures, tax cuts, and congressional procedures, not limiting the Fed's short-run monetary policy tools.

D: why it's wrongThe plan focused on domestic fiscal discipline and balanced budget constitutional amendments, not expanding central bank statutory autonomy.

Tap any option to see why it's right or wrong.

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