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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. 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.






2. 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.






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






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






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






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






7. Extreme economic growth






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






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






10. The real cost of changing a listed price.






11. 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.






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






13. An increase in spending due to a perceived increase in wealth.






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






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






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






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






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






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






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






22. Caused by changes in the overall economy.






23. Organizations that act as moderators between employers and employees






24. A macroeconomic policy that directly affects the structure and various institutions of an economy






25. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.






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






27. The continuing increase in the average level of prices of goods and services over time.






28. Represents the governmental tax rate that will best maximize tax revenues.






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






30. The maximum amount that an economy can output over a period of time






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






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






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






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






35. Goods and services sector - Labor sector - monetary sector - international sector.






36. Total supply of goods and services in an economy






37. 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.






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






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






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






41. 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






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






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






44. The lowest point of the recession






45. A quantity that is measured in real terms - the actual quantity of a good or service






46. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.






47. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply






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






49. The beginning of a recession






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