Which of the following schools of thought criticized the Fed\'s policy of target

Question

Which of the following schools of thought criticized the Fed's policy of targeting interest rates? a. The new Keynesians b. The Keynesians c. The monetarists d. The classical economists e. The new classical economists 6. An economist from which school of thought would most likely accept the following- "The wide acceptance and practice of activist government fiscal policy." a. Traditional classical economics b. Neoclassical economics c. Marxist economics d. New monetarist economics e. Keynesian economics 7. Which of the following is true of the classical model? a. Changes in aggregate demand does not have any impact on the aggregate price level. b. The aggregate supply curve is perfectly elastic. c. An increase in aggregate demand increases the price level, output remaining unchanged. d. Changes in aggregate demand determines the equilibrium output of the economy. e. Real GDP and price level remain unchanged irrespective of changes in aggregate demand and supply. 8. An economist from which of the following schools of thought would most likely say - "An increase in government expenditure will only increase inflation, because the aggregate supply curve is vertical"? a. Neoclassical economics b. Traditional classical economics c. New Keynesian economics d. Keynesian economics e. Marxist economics 9. The new classical school holds that: a. macroeconomic equilibrium is achieved only through active government intervention. b. unemployment is only temporary, because the economy tends naturally toward equilibrium. c. rigid prices and wages prevent the economy from achieving equilibrium. d. macroeconomic equilibrium cannot occur as long as the aggregate supply curve is vertical. e. rational expectations result in involuntary unemployment and prolonged periods of macroeconomic disequilibrium.

Explanation / Answer

(5) The correct answer is option (A)

(6)The correct answer is option (B)

(7) The correct answer is option (A)

(8) The correct answer is option (C)

(9) The correct answer is option (E)

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