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CLEP Macroeconomics - 3

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. When an economic unit makes more than it spends






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






3. When inflation suddenly deviates from its normal course.






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






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






6. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).






7. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.






8. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.






9. The portion of planned aggregate expenditure that is not based on output






10. Goods that are used in the production of final goods.






11. 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






12. Combines pure market and command. Example: Japan






13. Short-run macroeconomic equilibrium occurs at the level of GDP where the:






14. Total tax paid divided by total (taxable) income - as a percentage.






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






16. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally






17. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.






18. Goods and services sector - Labor sector - monetary sector - international sector.






19. Refers to individuals between jobs seeking new employment - people re-entering the workforce (ie mom whose kids are grown) - and new entrants (ie college graduates).






20. The monetary sector focuses on the ________ rate.






21. The goods and services sector focuses largely on the level of ______ .






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






23. Used in the production of final goods - but instead of being consumed - are available for reuse.






24. 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.






25. A result of there only being one buyer of a resource input - good - or service.






26. Goods like food and clothing that have a short lifespan.






27. 1 percent more unemployment results in 2 percent less output.

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






29. 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.






30. 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.






31. The lowest point of the recession






32. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply






33. 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






34. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation






35. The real cost of changing a listed price.






36. A free market system that relies on private property ownership and supply and demand






37. The part of economics study that looks at the operation of a nation's economy as a whole






38. The annual percentage rate of change in price level reflected by price indexes






39. When prices fall consistently over time - leading to negative inflation.






40. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made






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






42. Extreme economic growth






43. 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.






44. There is an ___________ ___ when aggregate output is above potential output






45. An increase in spending due to a perceived increase in wealth.






46. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.






47. The labor sector highlights the rate of ____ .






48. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.






49. Total supply of goods and services in an economy






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