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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 tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Command economic system
Fisher effect
Substitution effect
Laffer curve
2. The relationship between disposable income and spending on consumable goods and services
Fisher effect
Inflation shock
Consumption function
Market equilibrium
3. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Output gap
Fisher effect
Total surplus
Substitution effect
4. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
Rationing
Law of Supply
Free market
Policy reaction function
5. 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.
Price
Real employment
Law of Demand
Planned aggregate expenditure (PAE)
6. Total supply of goods and services in an economy
Fisher effect
Aggregate supply
Law of Supply
Laffer curve
7. A Scottish man (1723-1790) who is known as the father of modern economics.
Interest
Labor supply
Adam Smith
Mixed market
8. The international sector emphasizes the ________ rate.
Exchange
Inside lag
Peak
Marginal benefit
9. The level of output where output equals planned aggregate expenditure
Interest
AD curve intersects the SAS curve
Frictional unemployment
Short run equilibrium output
10. When inflation suddenly deviates from its normal course.
Marginal tax rate
Boom
Inflation shock
Consumer Nondurables
11. An increase in spending due to a perceived increase in wealth.
Real employment
Marginal cost
Law of Demand
The Wealth Effect
12. 1 percent more unemployment results in 2 percent less output.
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13. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Price level
Automatic stabilizers
NRU
decreases increases
14. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.
Real employment
Labor unions
The quality adjustment bias
Consumption
15. Organizations that act as moderators between employers and employees
Income
Four sectors of the economy
Labor unions
Intangible Assets
16. Extreme economic growth
AD curve intersects the SAS curve
Boom
Law of Demand
Stabilization policies
17. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Businesses
Socially optimal quantity
Price
Marginal cost
18. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Total surplus
Macroeconomics
LRAS
Keynesian model
19. The total value of goods and services produced in a country valued at current prices.
Normative analysis
Keynesian economic theory
Intermediate goods
Nominal GDP
20. Most free-market banking systems are based on __________ reserves.
Output gap
LRAS
Supply-side policy
Fractional
21. 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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22. The rise in taxes that occurs when before-tax income increases by one dollar
Marginal tax rate
Consumption
Congressional budget office
Real quantity
23. Payments that the government makes to unemployed workers.
Marginal cost
Policy reaction function
The real GDP per person
Unemployment insurance
24. An increase in this would cause an increase in the aggregate supply
Labor productivity
Monetarism
Anchored inflation expectations
Marginal tax rate
25. When people's expectations of future inflation do not change even though inflation rates change.
Contractionary policies
Policy reaction function
Anchored inflation expectations
Socially optimal quantity
26. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Economic efficiency
Expansionary policies
Labor productivity
Socially optimal quantity
27. 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.
Fisher effect
Contractionary policies
Labor supply
The rate of inflation
28. The monetary sector focuses on the ________ rate.
Interest
Laffer curve
Automatic stabilizers
Peak
29. The speed that money changes hands in order to buy and sell final goods and services.
Short run equilibrium output
Fisher effect
Consumer Nondurables
Velocity
30. Legal entity that has received a charter from a state or federal government.
Corporation
Buyer's surplus
Quantity equation
Socially optimal quantity
31. The adding up of individual economic variables to obtain a large - general picture of the economy.
Aggregation
Price level
Real GDP
Aggregate demand
32. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Keynesian model
Law of Supply
Marginal benefit
Socially optimal quantity
33. The price of a good or service in relation to the price of other goods and services.
Velocity
Relative price
Adam Smith
Recession
34. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Hyperinflation
Excess Supply
The quality adjustment bias
Labor productivity
35. The annual percentage rate of change in price level reflected by price indexes
Fisher effect
Consumption
Trough
The rate of inflation
36. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.
Anchored inflation expectations
Traditional economic system
The real GDP per person
Rationing
37. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
Exchange
The quality adjustment bias
Intermediate Goods
Inflation
38. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Seller's surplus
Invisible hand
Market equilibrium
Hyperinflation
39. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Complement
Supply-side policy
Marginal tax rate
Boom
40. Caused by changes in the overall economy.
Cyclical unemployment
Traditional economic system
Consumer Nondurables
Sunk cost
41. The maximum amount that an economy can output over a period of time
Saving
Potential output
Cyclical unemployment
The Wealth Effect
42. The rate of price increase on all things except food and energy
Consumption
Corporation
Core rate of inflation
Gross National Product (GNP)
43. The real cost of changing a listed price.
The rate of inflation
Menu cost
Keynesian model
Inflation inertia
44. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Deflation
Real employment
Substitution effect
Monetarism
45. 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.
Equilibrium price
Law of Supply
Gross National Product (GNP)
Recession
46. 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.
Command economic system
LRAS
Aggregate Supply
Labor productivity
47. The labor sector highlights the rate of ____ .
Pay
Phillips curve
Autonomous Expenditure
Expansionary policies
48. Business entity which legally has no separate existence from its owner.
Relative price
Sole proprietorship
Pay
Partnership
49. Patents - Goodwill - and Trademarks (lack physical substance)
Credibility of monetary policy
Relative price
Intangible Assets
Price
50. The government office that is responsible for projecting federal surpluses and deficits
Congressional budget office
Peak
Deflation
Participation rate