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






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






3. A sudden and drastic change in the supply curve






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






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






6. Relation between inflation and unemployment






7. Classical economists believe that the AS curve is _______






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






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






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






11. 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






12. The competition in the marketplace provides economic stability






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






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






15. Fundamental equation of monetarism






16. According to Keynesian theory - AS curve is __________






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






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






19. _________ will prefer to consume than to save






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






21. Money is at the root of aggregate demand






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






23. This consequence of national debt may lead to inflation






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






25. Inflation that results from an initial increase in costs






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






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






28. Keynesian economics believes that AD is ________






29. Basic Keynesian economic equation






30. Encourage foreign investment






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






32. One source of public debt






33. Rational Expectations Theorists






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






35. The budget must be balanced each year






36. Inflation accompanied by simultaneous increases in prices and unemployment






37. Relationship between inflation and unemployment






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






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






40. Accumulation of government deficits






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






42. 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






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






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






45. The price level rises and money loses value






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






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






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






Can you answer 50 questions in 15 minutes?



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