Chapter 19 - The Macroeconomy: Fiscal and Monetary Issues

Question 1

monetary overhang

Answer 1

excess monetary emissions in an otherwise state-controlled economy

Question 2

shadow economy

Answer 2

the part of the economy that is outside official channels often conducted in non-monetary terms but not necessarily in violation of the law.

Question 3

stabilization

Answer 3

the adoption of policies designed to limit the downside of economic activity as command economies replaced state mechanisms with market mechanisms

Question 4

sterilization

Answer 4

policy designed to prevent the loss of foreign exchange reserves from affecting the domestic money stock

Question 5

IMF

Answer 5

The International Monetary Fund (IMF) is an international organization headquartered in Washington, D.C., of “189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world

Question 6

Washington Consesnus

Answer 6

set of guidelines developed and implemented by the IMF to promote economic growth through macro stabilization and privatization

Question 7

“Western-style” tax system

Answer 7

the tax system used in market economies (sales, VAT, and so on) as opposed to command economies (turnover tax, etc)