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






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






3. Classical economists believe that the AS curve is _______






4. Money is at the root of aggregate demand






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






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






7. Rational Expectations Theorists






8. NCE/RET imply that the aggregate supply curve is _______






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






10. Accumulation of government deficits






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






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






13. The competition in the marketplace provides economic stability






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






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






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






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






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






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






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






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






22. Fundamental equation of monetarism






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






24. Inflation accompanied by simultaneous increases in prices and unemployment






25. A sudden and drastic change in the supply curve






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






27. _________ will prefer to consume than to save






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






29. Relation between inflation and unemployment






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






31. Basic Keynesian economic equation






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






33. This consequence of national debt may lead to inflation






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






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






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






37. The price level rises and money loses value






38. Relationship between inflation and unemployment






39. Encourage foreign investment






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






41. Keynesian economics believes that AD is ________






42. According to Keynesian theory - AS curve is __________






43. The budget must be balanced each year






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






45. 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






46. Inflation that results from an initial increase in costs






47. One source of public debt






48. 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