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






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






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






4. The price level rises and money loses value






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






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






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






8. Relation between inflation and unemployment






9. 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






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






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






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






13. Keynesian economics believes that AD is ________






14. Inflation that results from an initial increase in costs






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






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






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






18. Inflation accompanied by simultaneous increases in prices and unemployment






19. Relationship between inflation and unemployment






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






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






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






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






24. One source of public debt






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






26. The budget must be balanced each year






27. A sudden and drastic change in the supply curve






28. According to Keynesian theory - AS curve is __________






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






30. Fundamental equation of monetarism






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






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






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






34. Basic Keynesian economic equation






35. 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






36. Money is at the root of aggregate demand






37. This consequence of national debt may lead to inflation






38. Encourage foreign investment






39. Rational Expectations Theorists






40. Classical economists believe that the AS curve is _______






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






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






43. _________ will prefer to consume than to save






44. The competition in the marketplace provides economic stability






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






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






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






48. Accumulation of government deficits