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Questions and Answers
What is the main characteristic of the Secular Stagnation trend?
What is the main characteristic of the Secular Stagnation trend?
- A period of rapid economic growth with minimal financial instability
- A short-term fluctuation in GDP growth that can be easily addressed through monetary policy
- A trend decline in growth that has occurred since the late 1990s, accompanied by an inability to achieve growth without financial instability (correct)
- A golden era of economic growth with low inflation and high employment
According to Lawrence Summers, what can affect trend growth?
According to Lawrence Summers, what can affect trend growth?
- Only fiscal policy decisions
- The economic growth rate is solely determined by the natural rate of growth
- Cyclical developments, such as ups and downs in the economy, can cause permanent scarring (correct)
- Only monetary policy decisions
What is the concept of Hysteresis in the context of economics?
What is the concept of Hysteresis in the context of economics?
- A period of rapid inflation
- Cyclical developments that can produce long-term scarring on the economy (correct)
- A type of monetary policy tool
- A sudden and sharp increase in economic growth
What is the Zero Lower Bound?
What is the Zero Lower Bound?
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What is the main argument of mainstream economists regarding the Secular Stagnation trend?
What is the main argument of mainstream economists regarding the Secular Stagnation trend?
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What has been required to keep GDP rising in the US and other advanced economies?
What has been required to keep GDP rising in the US and other advanced economies?
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