Test your basic knowledge |

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






2. Relationship between inflation and unemployment






3. Inflation that results from an initial increase in costs






4. This consequence of national debt may lead to inflation






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






6. Fundamental equation of monetarism






7. One source of public debt






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






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






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






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






12. A sudden and drastic change in the supply curve






13. The budget must be balanced each year






14. Accumulation of government deficits






15. The competition in the marketplace provides economic stability






16. According to Keynesian theory - AS curve is __________






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






18. Keynesian economics believes that AD is ________






19. Inflation accompanied by simultaneous increases in prices and unemployment






20. 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






21. Classical economists believe that the AS curve is _______






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






23. Basic Keynesian economic equation






24. The price level rises and money loses value






25. Encourage foreign investment






26. Rational Expectations Theorists






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






28. _________ will prefer to consume than to save






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






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






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






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






33. 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






34. Money is at the root of aggregate demand






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






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






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






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






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






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






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






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






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






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






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






48. Relation between inflation and unemployment