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Test your basic knowledge |
CLEP Macroeconomics - 3
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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. Goods not counted in the nation's GDP.
Intermediate Goods
Price
Complement
Aggregate demand
2. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Output gap
Adam Smith
Menu cost
Credibility of monetary policy
3. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Capital income
Nominal GDP
The real GDP per person
Asset
4. Organizations that act as moderators between employers and employees
Outside lag
Real GDP
Consumption
Labor unions
5. The lowest point of the recession
Trough
Command economic system
Socially optimal quantity
Aggregation
6. The speed that money changes hands in order to buy and sell final goods and services.
Peak
Fractional
Velocity
Sunk cost
7. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
Traditional economic system
Inflation
Free market
Stabilization policies
8. When prices fall consistently over time - leading to negative inflation.
Asset
Deflation
The real GDP per person
Labor productivity
9. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).
Intermediate goods
Nominal GDP
Phillips curve
Labor productivity
10. A result of there only being one buyer of a resource input - good - or service.
Gross Domestic Product (GDP)
Monopsony
Policy reaction function
Aggregation
11. The portion of planned aggregate expenditure that is not based on output
Intermediate goods
Inflation shock
Autonomous Expenditure
Intermediate Goods
12. The real cost of changing a listed price.
Short run equilibrium output
Menu cost
Inflation inertia
Phillips curve
13. The basic assumption of this model is that in the short run - firms meet demand at present price.
Keynesian model
Indexing
Short run equilibrium output
Real quantity
14. The smallest dollar amount for which a seller would be willing to sell an additional unit - generally equal to marginal cost
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15. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Rationing
Traditional economic system
Nominal GDP
Aggregation
16. A macroeconomic policy that directly affects the structure and various institutions of an economy
Structural policy
Labor unions
Aggregate demand
Price level
17. That efficiency leads to economic prosperity for all.
Capital goods
The principle of efficiency
Planned aggregate expenditure (PAE)
Velocity
18. The rate of price increase on all things except food and energy
Traditional economic system
Core rate of inflation
Price level
The quality adjustment bias
19. The total value of goods and services produced in a country valued at current prices.
Nominal GDP
Price
The real GDP per person
Planned aggregate expenditure (PAE)
20. An increase in spending due to a perceived increase in wealth.
Standard of living
Expansionary policies
Capital income
The Wealth Effect
21. A quantity that is measured in real terms - the actual quantity of a good or service
Real quantity
Relative price
Exchange
Planned aggregate expenditure (PAE)
22. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Structural policy
Seller's reservation price
Exchange
Keynesian economic theory
23. When both producers and consumers are satisfied with their quantities at market price.
LRAS
Market equilibrium
Substitution bias
Asset
24. Government policies intended to avoid inflation and other effects due to increased expansion. Includes: Action such as decreasing government spending - increasing taxes - and decreasing the supply of money - and raising interest rates.
Capital income
Contractionary policies
Law of Diminishing Marginal Utility
Output gap
25. The total planned spending on final goods and services.
Four sectors of the economy
Phillips curve
Normative analysis
Planned aggregate expenditure (PAE)
26. Concerned with analyzing whether or not a policy should be used.
Velocity
Keynesian model
Normative analysis
Real GDP
27. The maximum amount that an economy can output over a period of time
Tangible Assets
Price
Business cycle
Potential output
28. 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.
Structural unemployment
Law of Supply
Complement
Average tax rate
29. The monetary sector focuses on the ________ rate.
Inflation inertia
Frictional unemployment
Recession
Interest
30. A Scottish man (1723-1790) who is known as the father of modern economics.
Adam Smith
Short run equilibrium output
Partnership
Lorenz curve
31. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Structural unemployment
Fractional
Law of Demand
Keynesian economic theory
32. A GDP decline that lasts two-quarters (six months). A period of slow economic growth
Economic efficiency
Macroeconomics
decreases increases
Recession
33. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Phillips curve
Real quantity
Disinflation
Interest
34. The degree to which people have access to goods and services that make their lives better.
Exchange
Aggregate demand
Standard of living
Law of Diminishing Marginal Utility
35. 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.
Quantity equation
Fisher effect
Command economic system
Monopsony
36. The increase in total cost that comes from producing one additional unit of a specific good or service.
Participation rate
Marginal cost
Outside lag
Inflation shock
37. Extreme economic growth
Boom
Asset
Deflation
Labor productivity
38. The price of a good or service in relation to the price of other goods and services.
Business cycle
Real quantity
Relative price
Substitution bias
39. Describes how the economy directly effects the actions policymakers take.
Interest
Policy reaction function
Total surplus
Quantity equation
40. The ease with which an asset can be converted to currency.
Aggregate Supply
Liquidity
Phillips curve
Sunk cost
41. The difference between the price received by the seller and the seller's reservation price
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42. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Inflationary gap
Aggregate supply shock
Aggregate demand
Economic efficiency
43. The amount of workers that are willing to work for a real wage.
Labor supply
Phillips curve
Inside lag
Macroeconomics
44. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Disinflation
Quantity equation
Core rate of inflation
decreases increases
45. Total tax paid divided by total (taxable) income - as a percentage.
Labor productivity
Average tax rate
Normative analysis
Real employment
46. Goods like food and clothing that have a short lifespan.
Corporation
Consumer Nondurables
Seller's reservation price
Inside lag
47. The output per employed worker
Labor productivity
Stabilization policies
Traditional economic system
Free market
48. The adding up of individual economic variables to obtain a large - general picture of the economy.
Core rate of inflation
Mixed market
Aggregation
Deflation
49. The movement of workers between jobs - companies - and industries
Worker mobility
Intermediate Goods
Asset
Law of Demand
50. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Real GDP
Substitution effect
Free market
decreases increases