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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. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Market equilibrium
Consumption function
decreases increases
Deflation
2. The lowest point of the recession
Intermediate Goods
Trough
Inflation shock
Macroeconomics
3. Total supply of goods and services in an economy
Monetarism
Normative analysis
Capital goods
Aggregate supply
4. Extreme economic growth
Unemployment insurance
LRAS
Boom
Liquidity
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.
Aggregate supply
Inflation
Consumption function
Law of Demand
6. The price of a good or service in relation to the price of other goods and services.
Relative price
Tangible Assets
Boom
Monetarism
7. There is an ___________ ___ when aggregate output is above potential output
Labor unions
Aggregation
Inflationary gap
Laffer curve
8. Describes how the economy directly effects the actions policymakers take.
Policy reaction function
Relative price
Output gap
Keynesian economic theory
9. The maximum amount that an economy can output over a period of time
AD curve intersects the SAS curve
Capital goods
Gross Domestic Product (GDP)
Potential output
10. When people's expectations of future inflation do not change even though inflation rates change.
Anchored inflation expectations
Nominal GDP
Indexing
NRU
11. The real cost of changing a listed price.
Menu cost
Pay
Intermediate Goods
Trough
12. Concerned with analyzing whether or not a policy should be used.
Normative analysis
Real quantity
Price
Laffer curve
13. The government office that is responsible for projecting federal surpluses and deficits
Inflation
Congressional budget office
Labor unions
Unemployment insurance
14. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Aggregate Supply
Indexing
The quality adjustment bias
Supply-side policy
15. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Socially optimal quantity
Trough
The Wealth Effect
Marginal benefit
16. 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.
Gross Domestic Product (GDP)
Planned aggregate expenditure (PAE)
Asset
Frictional unemployment
17. The portion of planned aggregate expenditure that is not based on output
Autonomous Expenditure
Core rate of inflation
Consumption
Marginal tax rate
18. Goods like food and clothing that have a short lifespan.
Consumer Nondurables
Labor productivity
Intermediate goods
Reservation price
19. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Output gap
Monetarism
Price level
Phillips curve
20. The total planned spending on final goods and services.
Price
Planned aggregate expenditure (PAE)
Capitalism
Gross National Product (GNP)
21. When there is no cyclical unemployment and every person who wishes to work is able to find a job at the prevailing rate for wages and in the prevailing working conditions.
Real employment
Average tax rate
Macroeconomics
Real quantity
22. Goods not counted in the nation's GDP.
The Wealth Effect
Intermediate Goods
Relative price
Complement
23. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Unemployment insurance
Price
Inflationary gap
Participation rate
24. A result of there only being one buyer of a resource input - good - or service.
Rationing
Monopsony
Indexing
The rate of inflation
25. A macroeconomic policy that directly affects the structure and various institutions of an economy
Structural policy
Law of Demand
Expansionary policies
Marginal cost
26. 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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27. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.
Price
Relative price
Anchored inflation expectations
The real GDP per person
28. When inflation suddenly deviates from its normal course.
Phillips curve
Inflation shock
Four sectors of the economy
Participation rate
29. 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).
Capital goods
Businesses
Structural policy
Frictional unemployment
30. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Substitution effect
Credibility of monetary policy
Law of Supply
Excess Supply
31. An increase in spending due to a perceived increase in wealth.
Standard of living
Market equilibrium
LRAS
The Wealth Effect
32. The output per employed worker
Labor productivity
Autonomous Expenditure
Structural policy
Price
33. A large - unexpected change in the cost of resources.
Aggregate supply shock
Participation rate
Indexing
Seller's reservation price
34. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
Price
Autonomous Expenditure
Free market
Trough
35. That efficiency leads to economic prosperity for all.
Consumption function
The principle of efficiency
Supply-side policy
Planned aggregate expenditure (PAE)
36. The adding up of individual economic variables to obtain a large - general picture of the economy.
Quantity equation
Okun's Law
Aggregation
Marginal tax rate
37. Natural Rate of Unemployment - a rate that will always exist
NRU
Normative analysis
Outside lag
Participation rate
38. The rise in taxes that occurs when before-tax income increases by one dollar
Socially optimal quantity
Marginal tax rate
Core rate of inflation
Consumption
39. 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.
Income
Law of Supply
Sole proprietorship
Labor supply
40. The annual percentage rate of change in price level reflected by price indexes
Aggregate demand
The quality adjustment bias
AD curve intersects the SAS curve
The rate of inflation
41. Business entity which legally has no separate existence from its owner.
Standard of living
Market equilibrium
Expansionary policies
Sole proprietorship
42. The movement of workers between jobs - companies - and industries
Capitalism
Worker mobility
Corporation
Output gap
43. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
Aggregate Supply
Corporation
Monetarism
Phillips curve
44. The total value of goods and services produced in a country valued at current prices.
Sunk cost
Structural unemployment
The real GDP per person
Nominal GDP
45. Combines pure market and command. Example: Japan
Quantity equation
Adam Smith
Mixed market
Aggregation
46. The relationship between disposable income and spending on consumable goods and services
Consumption function
Price
Marginal benefit
Marginal cost
47. 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
Potential output
Anchored inflation expectations
Worker mobility
Monetarism
48. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Trough
Capital goods
Capital income
Average tax rate
49. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Total surplus
Structural unemployment
The quality adjustment bias
Hyperinflation
50. The ease with which an asset can be converted to currency.
Capitalism
Keynesian model
Liquidity
Contractionary policies