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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. 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.






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






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






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






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






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






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






8. 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.






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






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






11. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.






12. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.






13. The increase in total cost that comes from producing one additional unit of a specific good or service.






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






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






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






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






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






19. Is equal to Consumption + Government Expenditures + Investment + Exports - Imports The market value of all goods and services produced within a nation during a specified amount of time.






20. The time between the need for a macroeconomic policy and its implementation






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






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






24. Money multiplied by velocity equals nominal GDP.






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






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






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






28. The degree to which people have access to goods and services that make their lives better.






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






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






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






32. 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






33. Concerned with analyzing whether or not a policy should be used.






34. Business entity which legally has no separate existence from its owner.






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






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






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






38. Government policies intended to increase spending and output.






39. Used to demonstrate shifts in income distribution among a population over time.






40. The percentage of working-age people within the labor force






41. Patents - Goodwill - and Trademarks (lack physical substance)






42. 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).






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






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






45. The real cost of changing a listed price.






46. The labor sector highlights the rate of ____ .






47. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus






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






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






50. A policy that affects potential output