Blog

Variable inflation has higher costs than stable inflation with the same average.

Free junior college tuition fees in the United States is a cost-effective way to increase college enrollment. (Background: Tuition and fees are already low for public junior colleges in the U.S., but there is still positive.)

Free trade hurts American workers, but helps workers in low-wage nations.

In a nation with flexible exchange rates, assume there is a fiscal expansion (G̅ up and/or T̅ down) and offsetting monetary policy (that is, monetary contraction). We expect stable output, lower inflation, lower real interest rates, higher investment, and a stronger currency.

Frictional (or search) unemployment represents people rationally choosing to search for a job.  Thus, no government policy is called for to address it.

A balanced budget rule (so long as it corrected for cyclical factors) would be a good thing.

The long-term fiscal problems of most industrialized nations are primarily due to: [Select all that apply]

Assume adaptive expectations. To end an inflation, a central bank should [Check all that apply]

If the European Central bank cuts long-term interest rates in the Eurozone, then the United States will be better off.

Answer 4 out of the 5 next short answer questions (Worth 12pts each)