_____39. The economic variable that led to a decline in monetarist thought in th
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Question
_____39. The economic variable that led to a decline in monetarist thought in the late 1980’s was:
a large budget deficit created by the large federal tax cuts.
the instability in growth rates of GDP created by a decline in production.
money velocity no longer was stable and became difficult to calculate.
all of these statements contributed to the decline.
none of these statements contributed to the decline.
_____40. The basic assumption that agents act in their own self interest and markets move to equilibrium is:
A. Mercantilism.
B. Keynesian Theory.
C. Monetarism.
D. Friedmanism.
E. New Classical Economics
_____41. Arthur Laffer’s Theory of Tax Reform was part of which school of economic thought?
Classical.
Keynesian.
Reaganomics.
Monetarism.
New Classical.
_____42. President George (H.W.) Bush called this school of thought “voodoo economics”.
Classical.
Keynesian.
Supply-Side.
Monetarism.
New Classical.
_____43. President Bill Clinton envisioned a more activist role for government in the economy. The idea would most closely reflect which school of thought?
Classical.
Supply-Side.
Monetarism.
Keynesian.
New Classical.
Explanation / Answer
Answers
39). the instability in growth rates of GDP created by a decline in production.
40). B. Keynesian Theory.
41). Reaganomics.
42). Supply-Side.
43). Classical.
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