An increase in consumer confidence would shift the:

The credit spread is countercyclical and coincident, suggesting that a sudden increase in financial frictions is most likely ________

A) when the economy has been expanding for some time B) after the economy has turned into a recession C) during the recovery phase of the business cycle D) when expected inflation is declining

Monetarists reject using discretionary monetary policy as an effective stabilization tool because they believe:

a. if the money supply grows at a rate equal to the economy's long-run rate of economic growth, then the economy will be unstable. b. that changes in the money stock do not affect output or prices. c. the Fed will miss its money supply targets and make the economy worse. d. monetary policy can stimulate aggregate demand, but it cannot affect inflation.