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






2. A sudden and drastic change in the supply curve






3. Inflation that results from an initial increase in costs






4. Encourage foreign investment






5. Relationship between inflation and unemployment






6. Accumulation of government deficits






7. Relation between inflation and unemployment






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






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






10. Basic Keynesian economic equation






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






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






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






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






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






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






17. Classical economists believe that the AS curve is _______






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






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






20. 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






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






22. One source of public debt






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






24. Money is at the root of aggregate demand






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






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






27. The price level rises and money loses value






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






29. Fundamental equation of monetarism






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






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






32. Inflation accompanied by simultaneous increases in prices and unemployment






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






34. Keynesian economics believes that AD is ________






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






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






37. This consequence of national debt may lead to inflation






38. The budget must be balanced each year






39. According to Keynesian theory - AS curve is __________






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






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






42. Rational Expectations Theorists






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






44. The competition in the marketplace provides economic stability






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






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






47. _________ will prefer to consume than to save






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







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Can you answer 50 questions in 15 minutes?


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