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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. The rate of price increase on all things except food and energy
Rationing
Cyclical unemployment
Aggregate demand
Core rate of inflation
2. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
Gross Domestic Product (GDP)
AD curve intersects the SAS curve
Labor supply
Potential output
3. The continuing increase in the average level of prices of goods and services over time.
Contractionary policies
Inflation
Monopsony
Core rate of inflation
4. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Capital income
The real GDP per person
AD curve intersects the SAS curve
Free market
5. 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.
Deflation
Trough
Real employment
Labor productivity
6. The beginning of a recession
The quality adjustment bias
Peak
Hyperinflation
Aggregate supply shock
7. A macroeconomic policy that directly affects the structure and various institutions of an economy
Free market
Outside lag
Intermediate Goods
Structural policy
8. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.
Aggregation
Trough
Aggregate demand
The real GDP per person
9. Concerned with analyzing whether or not a policy should be used.
Intangible Assets
Aggregate supply
Normative analysis
Nominal GDP
10. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Planned aggregate expenditure (PAE)
Rationing
Aggregate demand
Substitution effect
11. A result of there only being one buyer of a resource input - good - or service.
Monopsony
Menu cost
decreases increases
Deflation
12. The real cost of changing a listed price.
Planned aggregate expenditure (PAE)
Businesses
Seller's reservation price
Menu cost
13. Total tax paid divided by total (taxable) income - as a percentage.
Businesses
Fisher effect
Expansionary policies
Average tax rate
14. A Scottish man (1723-1790) who is known as the father of modern economics.
Adam Smith
decreases increases
Reservation price
Marginal tax rate
15. 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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16. 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
Monetarism
Reservation price
Price
Marginal tax rate
17. 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
Substitution bias
Monetarism
Consumption function
Market equilibrium
18. An increase in spending due to a perceived increase in wealth.
The Wealth Effect
Participation rate
Trough
Saving
19. When the rate of inflation is extremely high.
Potential output
Hyperinflation
Planned aggregate expenditure (PAE)
Unemployment insurance
20. The degree to which people have access to goods and services that make their lives better.
Seller's surplus
Deflation
Businesses
Standard of living
21. The percentage of working-age people within the labor force
Socially optimal quantity
Capital goods
Cyclical unemployment
Participation rate
22. 1 percent more unemployment results in 2 percent less output.
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23. The annual percentage rate of change in price level reflected by price indexes
The rate of inflation
Recession
Congressional budget office
Fisher effect
24. Most free-market banking systems are based on __________ reserves.
Fractional
The principle of efficiency
LRAS
Partnership
25. Used in the production of final goods - but instead of being consumed - are available for reuse.
Stabilization policies
Indexing
Phillips curve
Capital goods
26. The speed that money changes hands in order to buy and sell final goods and services.
Capital income
Average tax rate
Velocity
Price
27. 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
Real GDP
Aggregate Supply
Stabilization policies
Law of Demand
28. A GDP decline that lasts two-quarters (six months). A period of slow economic growth
Autonomous Expenditure
Boom
Velocity
Recession
29. Patents - Goodwill - and Trademarks (lack physical substance)
Sole proprietorship
Normative analysis
Adam Smith
Intangible Assets
30. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Real quantity
Excess Supply
Deflation
Complement
31. Government policies aimed at stabilizing the economy by eliminating output gaps
decreases increases
Gross Domestic Product (GDP)
Stabilization policies
Consumption
32. Combines pure market and command. Example: Japan
Total surplus
Interest
Mixed market
Average tax rate
33. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Output gap
decreases increases
Fisher effect
Cyclical unemployment
34. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Indexing
Trough
Relative price
The rate of inflation
35. The total value of goods and services produced in a country valued at current prices.
Nominal GDP
Structural unemployment
Marginal tax rate
Consumption function
36. 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.
Economic efficiency
Law of Supply
Average tax rate
Intermediate goods
37. The level of output where output equals planned aggregate expenditure
Short run equilibrium output
Real GDP
Keynesian model
Income
38. When prices fall consistently over time - leading to negative inflation.
Deflation
Complement
Inflation shock
Okun's Law
39. A policy that affects potential output
Mixed market
Structural policy
Supply-side policy
Total surplus
40. The relationship between disposable income and spending on consumable goods and services
Complement
Excess Supply
Consumption function
Labor unions
41. Goods that are used in the production of final goods.
Seller's reservation price
Average tax rate
Intermediate goods
Capitalism
42. The difference between the price received by the seller and the seller's reservation price
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43. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Exchange
The quality adjustment bias
Aggregate supply shock
Substitution effect
44. When the people believe that the nation's central bank will keep inflation rates low.
Free market
The Wealth Effect
Peak
Credibility of monetary policy
45. When both producers and consumers are satisfied with their quantities at market price.
Congressional budget office
Potential output
Capital goods
Market equilibrium
46. Payments that the government makes to unemployed workers.
Tangible Assets
Unemployment insurance
The rate of inflation
Potential output
47. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Price
Rationing
Okun's Law
Standard of living
48. The basic assumption of this model is that in the short run - firms meet demand at present price.
Keynesian model
Marginal tax rate
Command economic system
Indexing
49. The ease with which an asset can be converted to currency.
Liquidity
Trough
Keynesian model
Inside lag
50. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Market equilibrium
Traditional economic system
Corporation
Structural unemployment