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