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






2. Accumulation of government deficits






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






4. Inflation that results from an initial increase in costs






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






6. According to Keynesian theory - AS curve is __________






7. Money is at the root of aggregate demand






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






9. Rational Expectations Theorists






10. Relation between inflation and unemployment






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






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






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






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






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






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






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






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






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






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






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






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






23. Inflation accompanied by simultaneous increases in prices and unemployment






24. The price level rises and money loses value






25. A sudden and drastic change in the supply curve






26. Relationship between inflation and unemployment






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






28. Classical economists believe that the AS curve is _______






29. 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






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






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






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






33. The budget must be balanced each year






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






35. Fundamental equation of monetarism






36. This consequence of national debt may lead to inflation






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






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






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






40. Encourage foreign investment






41. 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






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






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






44. The competition in the marketplace provides economic stability






45. _________ will prefer to consume than to save






46. One source of public debt






47. Basic Keynesian economic equation






48. Keynesian economics believes that AD is ________







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Can you answer 50 questions in 15 minutes?


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