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






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






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






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






5. Relation between inflation and unemployment






6. Keynesian economics believes that AD is ________






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






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






9. Relationship between inflation and unemployment






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






11. Encourage foreign investment






12. The price level rises and money loses value






13. One source of public debt






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






15. A sudden and drastic change in the supply curve






16. Classical economists believe that the AS curve is _______






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






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






19. Inflation that results from an initial increase in costs






20. This consequence of national debt may lead to inflation






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






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






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






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






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






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






27. The competition in the marketplace provides economic stability






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






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






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






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






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






33. _________ will prefer to consume than to save






34. Money is at the root of aggregate demand






35. Accumulation of government deficits






36. Fundamental equation of monetarism






37. Basic Keynesian economic equation






38. Rational Expectations Theorists






39. The budget must be balanced each year






40. 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






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






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






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






44. 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






45. Inflation accompanied by simultaneous increases in prices and unemployment






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






47. According to Keynesian theory - AS curve is __________






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