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Test your basic knowledge |
CLEP Macroeconomics - 3
Start Test
Study First
Subjects
:
clep
,
economics
Instructions:
Answer 50 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. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Standard of living
Structural unemployment
Aggregate demand
Aggregate supply shock
2. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Sole proprietorship
Corporation
Socially optimal quantity
Policy reaction function
3. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Quantity equation
Standard of living
Peak
Rationing
4. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Buyer's surplus
Real GDP
Capital income
Mixed market
5. Business entity which legally has no separate existence from its owner.
Businesses
Sole proprietorship
Participation rate
Aggregate supply shock
6. Government policies intended to increase spending and output.
Expansionary policies
Trough
Menu cost
Sunk cost
7. An increase in spending due to a perceived increase in wealth.
Invisible hand
Business cycle
The Wealth Effect
Contractionary policies
8. Programs and economic policies such as income taxes - unemployment insurance and TANF (Temporary Aid to Needy Families) that are automatically in place - help to decrease fluctuations in the GDP.
Automatic stabilizers
Corporation
Aggregate demand
Labor unions
9. In a traditional economic system - the availability of resources is based on inheritance. Goods are only produced for consumption and surpluses do not occur. This type of economy is normally found in South American - Asian - and African countries.
Rationing
Peak
Traditional economic system
Consumption function
10. The monetary sector focuses on the ________ rate.
Intermediate goods
Interest
Real GDP
Congressional budget office
11. Caused by changes in the overall economy.
Income
Recession
Cyclical unemployment
Disinflation
12. The basic assumption of this model is that in the short run - firms meet demand at present price.
Intermediate Goods
Keynesian model
Planned aggregate expenditure (PAE)
Structural unemployment
13. The level of output where output equals planned aggregate expenditure
Income
Consumption
Short run equilibrium output
Real GDP
14. When people's expectations of future inflation do not change even though inflation rates change.
Aggregate demand
Anchored inflation expectations
Indexing
Four sectors of the economy
15. A law stating that as a person consumes additional units of a good - eventually the utility gained from each additional unit of the good decreases.
Law of Diminishing Marginal Utility
Gross National Product (GNP)
Saving
Capitalism
16. A Scottish man (1723-1790) who is known as the father of modern economics.
Adam Smith
Output gap
Consumer Nondurables
Velocity
17. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Tangible Assets
Marginal tax rate
Disinflation
Business cycle
18. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Substitution effect
Aggregate supply
Monopsony
Businesses
19. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
AD curve intersects the SAS curve
Intangible Assets
Substitution effect
Contractionary policies
20. (n) something of value; a resource; an advantage
Capitalism
Short run equilibrium output
Worker mobility
Asset
21. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Automatic stabilizers
Mixed market
Monetarism
Price
22. There is an ___________ ___ when aggregate output is above potential output
Aggregate supply
Inflationary gap
decreases increases
Velocity
23. When an economic unit makes more than it spends
Automatic stabilizers
Law of Diminishing Marginal Utility
Saving
Asset
24. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).
Adam Smith
Marginal cost
Phillips curve
Consumer Nondurables
25. The beginning of a recession
Worker mobility
Disinflation
Recession
Peak
26. That efficiency leads to economic prosperity for all.
Indexing
The principle of efficiency
Marginal tax rate
Seller's reservation price
27. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Price level
The real GDP per person
Structural policy
Total surplus
28. The price of a good or service in relation to the price of other goods and services.
Relative price
Price level
Seller's surplus
Substitution bias
29. The output per employed worker
Labor productivity
Trough
Income
Structural policy
30. The speed that money changes hands in order to buy and sell final goods and services.
Aggregate supply
Velocity
The rate of inflation
Short run equilibrium output
31. The time period between a policy's implementation and its desired effects on an economy.
Outside lag
Peak
Aggregate supply
Sole proprietorship
32. The law that states that as the price of any good or service increases - the quantity of that good or service will increase and vice versa.
Adam Smith
Law of Supply
decreases increases
Short run equilibrium output
33. An economic system in which all factors of production are owned and controlled by the government. Often referred to as a centrally planned economic system. Example: Former Soviet Union.
Aggregate supply
Businesses
Stabilization policies
Command economic system
34. An increase in this would cause an increase in the aggregate supply
Total surplus
Deflation
The Wealth Effect
Labor productivity
35. When inflation suddenly deviates from its normal course.
Intangible Assets
Sole proprietorship
Inflation shock
Anchored inflation expectations
36. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Free market
Stabilization policies
Deflation
decreases increases
37. A large - unexpected change in the cost of resources.
Intermediate Goods
Inflation
Capital goods
Aggregate supply shock
38. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Law of Diminishing Marginal Utility
The real GDP per person
Lorenz curve
Keynesian economic theory
39. The total planned spending on final goods and services.
Corporation
Intermediate Goods
Planned aggregate expenditure (PAE)
Expansionary policies
40. A quantity that is measured in real terms - the actual quantity of a good or service
Business cycle
Monopsony
Trough
Real quantity
41. The increase in total cost that comes from producing one additional unit of a specific good or service.
Price
Market equilibrium
Marginal cost
Gross National Product (GNP)
42. Is equal to Consumption + Government Expenditures + Investment + Exports - Imports The market value of all goods and services produced within a nation during a specified amount of time.
Gross Domestic Product (GDP)
Adam Smith
Structural unemployment
Inside lag
43. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.
Output gap
Labor productivity
Hyperinflation
Aggregate demand
44. The rise in taxes that occurs when before-tax income increases by one dollar
Marginal tax rate
Phillips curve
Buyer's surplus
Interest
45. When prices fall consistently over time - leading to negative inflation.
Consumption
Deflation
Hyperinflation
Reservation price
46. Extreme economic growth
Pay
Boom
Traditional economic system
Aggregate Supply
47. A law stating that as the price of a product increases the demand of that product decreases - while if the price of a product decreases the demand for that product increases.
Keynesian model
Law of Demand
Consumer Nondurables
Trough
48. A GDP decline that lasts two-quarters (six months). A period of slow economic growth
Recession
Anchored inflation expectations
Reservation price
Output gap
49. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Unemployment insurance
Gross National Product (GNP)
Liquidity
Real employment
50. The degree to which people have access to goods and services that make their lives better.
Expansionary policies
NRU
Real GDP
Standard of living