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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. _________ will prefer to consume than to save






2. The competition in the marketplace provides economic stability






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






4. Keynesian economics believes that AD is ________






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






6. Inflation accompanied by simultaneous increases in prices and unemployment






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






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






9. Rational Expectations Theorists






10. Inflation that results from an initial increase in costs






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






12. According to Keynesian theory - AS curve is __________






13. Money is at the root of aggregate demand






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






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






16. One source of public debt






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






18. Encourage foreign investment






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






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






21. Relation between inflation and unemployment






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






23. A sudden and drastic change in the supply curve






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






25. Accumulation of government deficits






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






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






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






29. Classical economists believe that the AS curve is _______






30. 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






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






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






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






34. This consequence of national debt may lead to inflation






35. 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






36. Fundamental equation of monetarism






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






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






39. The price level rises and money loses value






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






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






42. Basic Keynesian economic equation






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






44. Relationship between inflation and unemployment






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






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






47. The budget must be balanced each year






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