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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. The level of output where output equals planned aggregate expenditure






2. Government policies intended to increase spending and output.






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






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






5. 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






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






7. 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.






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






9. 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






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






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






12. The monetary sector focuses on the ________ rate.






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






14. Extreme economic growth






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






16. When the rate of inflation is extremely high.






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






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






19. The output per employed worker






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






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






22. 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






23. 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.






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






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






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






27. The beginning of a recession






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






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






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






31. 1 percent more unemployment results in 2 percent less output.

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






33. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.






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






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






36. The international sector emphasizes the ________ rate.






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






38. 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.






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






40. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.






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






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






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






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






45. Money multiplied by velocity equals nominal GDP.






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






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






48. When the people believe that the nation's central bank will keep inflation rates low.






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






50. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.