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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. The budget must be balanced each year






2. Encourage foreign investment






3. Keynesian economics believes that AD is ________






4. Rational Expectations Theorists






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






6. Relationship between inflation and unemployment






7. The competition in the marketplace provides economic stability






8. 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






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






10. Inflation that results from an initial increase in costs






11. Money is at the root of aggregate demand






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






13. Basic Keynesian economic equation






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






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






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






17. One source of public debt






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






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






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






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






22. This consequence of national debt may lead to inflation






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






24. Accumulation of government deficits






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






26. According to Keynesian theory - AS curve is __________






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






28. The price level rises and money loses value






29. A sudden and drastic change in the supply curve






30. Inflation accompanied by simultaneous increases in prices and unemployment






31. Relation between inflation and unemployment






32. Classical economists believe that the AS curve is _______






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






34. 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






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






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






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






38. Fundamental equation of monetarism






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






40. _________ will prefer to consume than to save






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






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






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






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






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






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






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






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







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Can you answer 50 questions in 15 minutes?


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