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