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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. Money is at the root of aggregate demand






2. 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






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






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






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






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






7. Inflation that results from an initial increase in costs






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






9. Basic Keynesian economic equation






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






11. According to Keynesian theory - AS curve is __________






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






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






14. A sudden and drastic change in the supply curve






15. 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






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






17. Accumulation of government deficits






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






19. Encourage foreign investment






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






21. The competition in the marketplace provides economic stability






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






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






24. The price level rises and money loses value






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






26. One source of public debt






27. The budget must be balanced each year






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






29. Fundamental equation of monetarism






30. Inflation accompanied by simultaneous increases in prices and unemployment






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






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






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






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






35. This consequence of national debt may lead to inflation






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






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






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






39. Relationship between inflation and unemployment






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






41. _________ will prefer to consume than to save






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






43. Relation between inflation and unemployment






44. Classical economists believe that the AS curve is _______






45. Keynesian economics believes that AD is ________






46. Rational Expectations Theorists






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






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







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Can you answer 50 questions in 15 minutes?


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