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Chapter 23 - Six Debates Over Macroeconomic Policy
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Economic theory
________ does not give a clear prediction about whether a higher rate of return would increase saving.
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Monetary policy
________ affects aggregate demand primarily by changing interest rates.
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Policymakers
________ should boost government spending, cut taxes, and expand the money supply.
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Fiscal policy
________ works with a lag because of the long political process that governs changes in spending and taxes.
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aggregate demand
Takes time for changes in interest rates to alter the ________ for goods and services.
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Inflation
________ allows for the possibility of negative real interest rates.
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Budget deficits
________ represent negative public savings.
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Monetary/fiscal policy
can stabilize aggregate demand.
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Tax cuts
________ have important influence on both aggregate demand and aggregate supply.
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Zero
________ provides a more natural focal point for policymakers than any other number.
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aggregate income
The fall in ________ is concentrated on those workers who lose their jobs.
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new plant
When the saving rate is higher, more resources are available for investment in ________ and equipment.
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Policymakers
________ should cut government spending, raise taxes, and reduce the money supply.
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aggregate demand
They increase ________ by increasing households disposable income.
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