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CLEP Macroeconomics: Monetary And Fiscal Policy

Subjects : clep, economics
Instructions:
  • Answer 48 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. NCE/RET imply that the aggregate supply curve is _______






2. Inflation that results from an initial increase in costs






3. This kind of budget exerts counter-cyclical pressure on the economy - balancing the budgets in the bad times with the surpluses of the good times






4. According to Keynesian theory - AS curve is __________






5. The budget must be balanced each year






6. New Classical Economists assert that households and firms pursue economics for their own ____-_________






7. Keynesian economics believes that AD is ________






8. ______ ______ is most important in a monetarist's view for determining output - price and employment levels






9. Which kind of inflation avoids some of the costs?






10. Rational Expectations Theorists






11. This consequence of national debt may lead to inflation






12. Modern fiscal policy favors this kind of budgets for the purpose of economic stabilization






13. The economy may stagnate in the absence of proper work - saving and investment incentives






14. _________ will prefer to consume than to save






15. Inflation accompanied by simultaneous increases in prices and unemployment






16. Inflation that results from an initial increase in aggregate demand






17. Amount spent = amount received - which is equation of exchange






18. The use of monetary policy by the central bank to cushion the blow of aggregate supply shocks






19. Fundamental equation of monetarism






20. Basic Keynesian economic equation






21. Large annual debts create this - promoting imports and stifling exports






22. In the short-run prices and wages are downwardly inflexible






23. The competition in the marketplace provides economic stability






24. Feeds on interest payments & limits a government's ability to use discretionary stabilization policies






25. Using taxes and spending to influence the level of GDP in the short run






26. Prices adjust in a natural way to bring the markets for goods and labor into equilibrium






27. Accumulation of government deficits






28. PQ or price level times physical volume of goods and services - is equal to...






29. Keynesian economists believe that monetary policy is a ____ tool for economic stability






30. Taxes and transfer payments that stabilize GDP without requiring policymakers to take explicit actions






31. Relationship between inflation and unemployment






32. A sudden and drastic change in the supply curve






33. Balancing the budget is secondary to ensuring that the economy runs at a non-inflationary full employment level






34. Money supply - velocity - price level - physical volume of goods and services






35. Believe that markets are highly competitive and adjust prices quickly to changes in supply and demand






36. One source of public debt






37. According to classical economics - AD curve is stable if....






38. According to Keynesian economists - this could pull the economy out of a recession or depression






39. According to RET - cost of this depends on whether or not it is expected






40. Relation between inflation and unemployment






41. This kind of fiscal policy is necessary for a balanced budget - would tend to magnify the changes in the economy - and make the business cycle more pronounced






42. Encourage foreign investment






43. The government must go to the money markets and compete with the private sector for funds






44. _____ tend to alter the behaviour of the public when imposed by the government






45. The price level rises and money loses value






46. Three ways the government could reduce deficit: increase/decrease (1) taxes - (2) spending - and (3) interest rates






47. Money is at the root of aggregate demand






48. Classical economists believe that the AS curve is _______