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CLEP Macroeconomics: Monetary And Fiscal Policy
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CLEP Macroeconomics: Monetary And Fiscal Policy
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25 Questions

1. Accumulation of government deficits

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

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

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

5. According to Keynesian theory - AS curve is __________

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

7. A sudden and drastic change in the supply curve

8. One source of public debt

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

10. Relationship between inflation and unemployment

11. 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

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

13. The price level rises and money loses value

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

15. Classical economists believe that the AS curve is _______

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

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

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

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

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

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

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

23. Rational Expectations Theorists

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

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

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