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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. Relationship between inflation and unemployment






3. Rational Expectations Theorists






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






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






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






7. Classical economists believe that the AS curve is _______






8. _________ will prefer to consume than to save






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






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






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






12. One source of public debt






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






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






15. Money is at the root of aggregate demand






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






17. Accumulation of government deficits






18. Keynesian economics believes that AD is ________






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






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






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






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






23. 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






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






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






26. Basic Keynesian economic equation






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






28. Inflation that results from an initial increase in costs






29. Fundamental equation of monetarism






30. The competition in the marketplace provides economic stability






31. 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






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






33. According to Keynesian theory - AS curve is __________






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






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






36. The price level rises and money loses value






37. Inflation accompanied by simultaneous increases in prices and unemployment






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






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






40. Relation between inflation and unemployment






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






42. This consequence of national debt may lead to inflation






43. Encourage foreign investment






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






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






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






47. A sudden and drastic change in the supply curve






48. The budget must be balanced each year