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CLEP Macroeconomics - 3
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Subjects
:
clep
,
economics
Instructions:
Answer 50 questions in 15 minutes.
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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 time period between a policy's implementation and its desired effects on an economy.
Capital income
Outside lag
Fisher effect
Labor supply
2. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
Nominal GDP
Credibility of monetary policy
LRAS
The real GDP per person
3. The level of output where output equals planned aggregate expenditure
Marginal tax rate
Equilibrium price
Short run equilibrium output
Indexing
4. 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
Okun's Law
Price
Recession
Monetarism
5. The maximum amount that an economy can output over a period of time
Laffer curve
Potential output
The rate of inflation
Automatic stabilizers
6. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Invisible hand
Law of Supply
Sole proprietorship
Fisher effect
7. Most free-market banking systems are based on __________ reserves.
AD curve intersects the SAS curve
Mixed market
Fractional
Relative price
8. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Partnership
Market equilibrium
Businesses
Socially optimal quantity
9. A large - unexpected change in the cost of resources.
Capital income
Excess Supply
Consumption
Aggregate supply shock
10. The total value of goods and services produced in a country valued at current prices.
Liquidity
Monetarism
Inside lag
Nominal GDP
11. When inflation suddenly deviates from its normal course.
Relative price
Aggregate demand
Seller's reservation price
Inflation shock
12. A measure of overall price levels at a specific point in the price index.
Expansionary policies
Contractionary policies
Price level
Free market
13. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
decreases increases
Cyclical unemployment
Total surplus
Rationing
14. Combines pure market and command. Example: Japan
Invisible hand
Mixed market
Potential output
Disinflation
15. Organizations that act as moderators between employers and employees
Cyclical unemployment
Monetarism
Aggregate supply shock
Labor unions
16. Extreme economic growth
Capital income
Boom
Four sectors of the economy
Liquidity
17. 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
NRU
Substitution bias
Traditional economic system
Velocity
18. The government office that is responsible for projecting federal surpluses and deficits
Potential output
Congressional budget office
Marginal benefit
decreases increases
19. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Gross Domestic Product (GDP)
Inflationary gap
Peak
Excess Supply
20. When people's expectations of future inflation do not change even though inflation rates change.
Excess Supply
The rate of inflation
Anchored inflation expectations
Peak
21. The rise in taxes that occurs when before-tax income increases by one dollar
Short run equilibrium output
Capital goods
Consumer Nondurables
Marginal tax rate
22. Represents the governmental tax rate that will best maximize tax revenues.
Unemployment insurance
Laffer curve
Intermediate goods
Socially optimal quantity
23. A result of there only being one buyer of a resource input - good - or service.
Sunk cost
Monopsony
Average tax rate
Keynesian economic theory
24. The portion of planned aggregate expenditure that is not based on output
Corporation
Autonomous Expenditure
Average tax rate
Aggregation
25. The beginning of a recession
Intermediate Goods
Command economic system
Peak
Potential output
26. A Scottish man (1723-1790) who is known as the father of modern economics.
Credibility of monetary policy
Potential output
Adam Smith
Seller's surplus
27. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Marginal cost
Invisible hand
Structural unemployment
Mixed market
28. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Macroeconomics
Standard of living
Substitution effect
decreases increases
29. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Seller's reservation price
Total surplus
Disinflation
Consumption function
30. The price of a good or service in relation to the price of other goods and services.
Participation rate
Law of Diminishing Marginal Utility
Relative price
Keynesian model
31. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Gross National Product (GNP)
Outside lag
The principle of efficiency
Disinflation
32. The output per employed worker
Labor productivity
Partnership
Seller's reservation price
Liquidity
33. Goods that are used in the production of final goods.
Sunk cost
Quantity equation
Adam Smith
Intermediate goods
34. Concerned with analyzing whether or not a policy should be used.
The real GDP per person
Intangible Assets
The rate of inflation
Normative analysis
35. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.
Income
Phillips curve
Aggregate demand
Inside lag
36. The increase in total benefit that comes from producing one additional unit.
Total surplus
Nominal GDP
Marginal benefit
Expansionary policies
37. The movement of workers between jobs - companies - and industries
Quantity equation
Law of Supply
Economic efficiency
Worker mobility
38. A record of economic increases and decreases over time.
Output gap
Business cycle
Traditional economic system
Labor supply
39. Real Estate - Equipment - and Cash (physical assets)
Tangible Assets
Liquidity
The real GDP per person
Labor supply
40. Goods and services sector - Labor sector - monetary sector - international sector.
Market equilibrium
Peak
Four sectors of the economy
Seller's reservation price
41. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Planned aggregate expenditure (PAE)
decreases increases
Partnership
Complement
42. 1 percent more unemployment results in 2 percent less output.
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43. Maximum price that a customer is willing to pay for a good
Rationing
Reservation price
Indexing
The quality adjustment bias
44. Goods not counted in the nation's GDP.
Trough
Intermediate Goods
Stabilization policies
The principle of efficiency
45. Government policies intended to increase spending and output.
Expansionary policies
The principle of efficiency
Inside lag
Standard of living
46. 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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47. The time between the need for a macroeconomic policy and its implementation
Invisible hand
Inside lag
Aggregate Supply
Marginal cost
48. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Keynesian economic theory
Reservation price
Inflationary gap
Income
49. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Normative analysis
LRAS
Core rate of inflation
decreases increases
50. The relationship between disposable income and spending on consumable goods and services
Partnership
Corporation
Consumption function
Sole proprietorship
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