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