SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
Test your basic knowledge |
CLEP Macroeconomics: Monetary And Fiscal Policy
Start Test
Study First
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. Three ways the government could reduce deficit: increase/decrease (1) taxes - (2) spending - and (3) interest rates
inflation
another name for New Classical Economists
increase taxes - decrease spending - or decrease interest rates
households
2. _________ will prefer to consume than to save
households
high interest rates
weak
unstable
3. Inflation accompanied by simultaneous increases in prices and unemployment
expansionary fiscal policy
stagflation
total public debt
recessions
4. Balancing the budget is secondary to ensuring that the economy runs at a non-inflationary full employment level
equation of exchange
functional finance
anticipated inflation
vertical
5. Fundamental equation of monetarism
equation of exchange
horizontal
inverse
anticipated inflation
6. Encourage foreign investment
MV = PQ
taxes
high interest rates
recessions
7. 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
nominal GDP
C + I + G + X = GDP
cyclically balanced budget
demand-pull inflation
8. According to Keynesian economists - this could pull the economy out of a recession or depression
recessions
Phillips curve
expansionary fiscal policy
classical theory of economics
9. Large annual debts create this - promoting imports and stifling exports
self-interests
anticipated inflation
imbalance of trade
recessions
10. PQ or price level times physical volume of goods and services - is equal to...
taxes
debt
nominal GDP
self-interests
11. NCE/RET imply that the aggregate supply curve is _______
vertical
functional finance
monetarist view
anticipated inflation
12. Relationship between inflation and unemployment
pro-cyclical
definition of M - V - P - and Q
inverse
self-interests
13. Inflation that results from an initial increase in costs
debt
cost-push inflation
inverse
households
14. Prices adjust in a natural way to bring the markets for goods and labor into equilibrium
taxes
cost-push inflation
classical economics
automatic stabilizers
15. Classical economists believe that the AS curve is _______
demand-pull inflation
recessions
Keynesian fiscal policy
vertical
16. Rational Expectations Theorists
debt
recessions
another name for New Classical Economists
demand-pull inflation
17. Feeds on interest payments & limits a government's ability to use discretionary stabilization policies
vertical
debt
total public debt
supply-side economics
18. The use of monetary policy by the central bank to cushion the blow of aggregate supply shocks
accommodation
weak
supply-side economics
total public debt
19. Which kind of inflation avoids some of the costs?
annually balanced budget
anticipated inflation
interest payments on loans
accommodation
20. Inflation that results from an initial increase in aggregate demand
cyclically balanced budget
demand-pull inflation
monetarist view
anticipated inflation
21. ______ ______ is most important in a monetarist's view for determining output - price and employment levels
vertical
automatic stabilizers
money supply
weak
22. Keynesian economists believe that monetary policy is a ____ tool for economic stability
weak
total public debt
debt
Keynesian fiscal policy
23. Keynesian economics believes that AD is ________
Phillips curve
unstable
functional finance
vertical
24. Money is at the root of aggregate demand
expansionary fiscal policy
classical theory of economics
supply shock
high interest rates
25. The price level rises and money loses value
interest payments on loans
increase taxes - decrease spending - or decrease interest rates
inflation
imbalance of trade
26. New Classical Economists assert that households and firms pursue economics for their own ____-_________
households
how to finance a deficit
self-interests
MV = PQ
27. _____ tend to alter the behaviour of the public when imposed by the government
vertical
weak
core of Keynesian economics
taxes
28. According to classical economics - AD curve is stable if....
inverse
money supply is constant
total public debt
vertical
29. Modern fiscal policy favors this kind of budgets for the purpose of economic stabilization
unbalanced
core of Keynesian economics
cyclically balanced budget
classical economics
30. The budget must be balanced each year
unstable
annually balanced budget
inflation
unbalanced
31. 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
cyclically balanced budget
stagflation
households
pro-cyclical
32. According to RET - cost of this depends on whether or not it is expected
taxes
inflation
nominal GDP
vertical
33. Basic Keynesian economic equation
demand-pull inflation
C + I + G + X = GDP
pro-cyclical
equation of exchange
34. Amount spent = amount received - which is equation of exchange
classical economics
MV = PQ
money supply
horizontal
35. Accumulation of government deficits
inflation
horizontal
taxes
total public debt
36. This consequence of national debt may lead to inflation
interest payments on loans
inflation
supply-side economics
nominal GDP
37. In the short-run prices and wages are downwardly inflexible
horizontal
core of Keynesian economics
inverse
vertical
38. Believe that markets are highly competitive and adjust prices quickly to changes in supply and demand
C + I + G + X = GDP
expansionary fiscal policy
anticipated inflation
NCE/RET
39. According to Keynesian theory - AS curve is __________
pro-cyclical
horizontal
supply shock
inverse
40. One source of public debt
nominal GDP
classical theory of economics
recessions
total public debt
41. Money supply - velocity - price level - physical volume of goods and services
MV = PQ
recessions
debt
definition of M - V - P - and Q
42. The economy may stagnate in the absence of proper work - saving and investment incentives
vertical
pro-cyclical
inflation
supply-side economics
43. Taxes and transfer payments that stabilize GDP without requiring policymakers to take explicit actions
cost-push inflation
automatic stabilizers
vertical
C + I + G + X = GDP
44. Using taxes and spending to influence the level of GDP in the short run
cost-push inflation
cyclically balanced budget
Keynesian fiscal policy
households
45. The government must go to the money markets and compete with the private sector for funds
cost-push inflation
how to finance a deficit
another name for New Classical Economists
monetarist view
46. A sudden and drastic change in the supply curve
nominal GDP
total public debt
supply shock
households
47. Relation between inflation and unemployment
vertical
vertical
unbalanced
Phillips curve
48. The competition in the marketplace provides economic stability
monetarist view
NCE/RET
classical economics
inflation