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CLEP Macroeconomics - 3

Subjects : clep, economics
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. The time between the need for a macroeconomic policy and its implementation

2. The total planned spending on final goods and services.

3. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.

4. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .

5. The ease with which an asset can be converted to currency.

6. When both producers and consumers are satisfied with their quantities at market price.

7. The difference between the price received by the seller and the seller's reservation price

8. The amount of workers that are willing to work for a real wage.

9. The basic assumption of this model is that in the short run - firms meet demand at present price.

10. When there is no cyclical unemployment and every person who wishes to work is able to find a job at the prevailing rate for wages and in the prevailing working conditions.

11. A record of economic increases and decreases over time.

12. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.

13. When the rate of inflation is extremely high.

14. Gross domestic product adjusted for inflation; gross domestic product in a year divided by the GDP price index for that year - the index expressed as a decimal

15. The international sector emphasizes the ________ rate.

16. The price of a good or service in relation to the price of other goods and services.

17. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available

18. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)

19. A GDP decline that lasts two-quarters (six months). A period of slow economic growth

20. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.

21. The government office that is responsible for projecting federal surpluses and deficits

22. The time period between a policy's implementation and its desired effects on an economy.

23. Real Estate - Equipment - and Cash (physical assets)

24. Total supply of goods and services in an economy

25. A flaw in the CPI that exaggerates real increases in the cost of living by failing to take into account customers ability to choose equally desirable goods or services when the price of their preferred good or service increases

26. 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.

27. The movement of workers between jobs - companies - and industries

28. Natural Rate of Unemployment - a rate that will always exist

29. A measure of overall price levels at a specific point in the price index.

30. The price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time.

31. A quantity that is measured in real terms - the actual quantity of a good or service

32. A policy that affects potential output

33. When inflation suddenly deviates from its normal course.

34. Money multiplied by velocity equals nominal GDP.

35. The economic theory that states the main cause of change in aggregate output and price level is the result of monetary supply and the interest rate that comes from the amount of monetary supply

36. 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.

37. Legal entity that has received a charter from a state or federal government.

38. When people's expectations of future inflation do not change even though inflation rates change.

39. 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.

40. An increase in this would cause an increase in the aggregate supply

41. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.

42. Represents the governmental tax rate that will best maximize tax revenues.

43. 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.

44. A large - unexpected change in the cost of resources.

45. Payments that the government makes to unemployed workers.

46. A macroeconomic policy that directly affects the structure and various institutions of an economy

47. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.

48. Goods not counted in the nation's GDP.

49. The increase in total benefit that comes from producing one additional unit.

50. That efficiency leads to economic prosperity for all.