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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. Caused by changes in the overall economy.






2. The relationship between disposable income and spending on consumable goods and services






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






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






5. A policy that affects potential output






6. 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.






7. The level of output where output equals planned aggregate expenditure






8. (n) something of value; a resource; an advantage






9. The monetary sector focuses on the ________ rate.






10. Maximum price that a customer is willing to pay for a good






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






12. The adding up of individual economic variables to obtain a large - general picture of the economy.






13. 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.






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






15. Describes how the economy directly effects the actions policymakers take.






16. A Scottish man (1723-1790) who is known as the father of modern economics.






17. The difference between a buyer's reservation price (the price they want to pay) and the actual price paid for a good or service

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






19. Government policies intended to increase spending and output.






20. The output per employed worker






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






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






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






24. Money multiplied by velocity equals nominal GDP.






25. Payments that the government makes to unemployed workers.






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






27. Organizations that act as moderators between employers and employees






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






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






30. Government policies aimed at stabilizing the economy by eliminating output gaps






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






32. The rate of price increase on all things except food and energy






33. The rise in taxes that occurs when before-tax income increases by one dollar






34. When the rate of inflation is extremely high.






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






36. Unicorporated entity that has shared ownership.






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






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






39. Most free-market banking systems are based on __________ reserves.






40. 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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41. Goods that are used in the production of final goods.






42. When inflation suddenly deviates from its normal course.






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






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






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






46. 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






47. When an economic unit makes more than it spends






48. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.






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






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







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