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