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Test your basic knowledge |
CLEP Macroeconomics - 3
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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. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Businesses
Substitution bias
Structural unemployment
Laffer curve
2. 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.
Short run equilibrium output
Monopsony
Congressional budget office
Law of Supply
3. The increase in total cost that comes from producing one additional unit of a specific good or service.
Gross Domestic Product (GDP)
Law of Diminishing Marginal Utility
Consumption function
Marginal cost
4. A large - unexpected change in the cost of resources.
Asset
Inflation
Aggregate supply shock
Equilibrium price
5. A macroeconomic policy that directly affects the structure and various institutions of an economy
Unemployment insurance
Structural policy
Congressional budget office
Outside lag
6. 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.
Consumer Nondurables
Disinflation
Command economic system
Capitalism
7. Money multiplied by velocity equals nominal GDP.
Substitution bias
Inflationary gap
Quantity equation
Relative price
8. The beginning of a recession
Peak
Contractionary policies
Participation rate
Equilibrium price
9. The price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time.
Structural unemployment
Equilibrium price
The rate of inflation
Planned aggregate expenditure (PAE)
10. The maximum amount that an economy can output over a period of time
Monopsony
Indexing
Potential output
The rate of inflation
11. That efficiency leads to economic prosperity for all.
Capital goods
Indexing
Boom
The principle of efficiency
12. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.
Aggregate demand
Nominal GDP
Consumption function
Command economic system
13. The part of economics study that looks at the operation of a nation's economy as a whole
Macroeconomics
Buyer's surplus
Recession
Businesses
14. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Anchored inflation expectations
The principle of efficiency
Structural policy
Gross National Product (GNP)
15. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Nominal GDP
Disinflation
Peak
Price
16. When both producers and consumers are satisfied with their quantities at market price.
Market equilibrium
Law of Supply
Laffer curve
Traditional economic system
17. The government office that is responsible for projecting federal surpluses and deficits
Substitution bias
Congressional budget office
Deflation
Contractionary policies
18. The movement of workers between jobs - companies - and industries
Contractionary policies
Worker mobility
Law of Supply
Labor productivity
19. The adding up of individual economic variables to obtain a large - general picture of the economy.
Aggregation
Mixed market
Unemployment insurance
Invisible hand
20. Extreme economic growth
Labor unions
Labor supply
Capitalism
Boom
21. Goods like food and clothing that have a short lifespan.
Consumer Nondurables
decreases increases
Recession
Macroeconomics
22. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
The quality adjustment bias
Real quantity
Complement
Partnership
23. Most free-market banking systems are based on __________ reserves.
Fractional
Invisible hand
Marginal cost
Autonomous Expenditure
24. The goods and services sector focuses largely on the level of ______ .
Income
Law of Supply
Real employment
Complement
25. The time period between a policy's implementation and its desired effects on an economy.
LRAS
Outside lag
Marginal benefit
Real employment
26. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Fisher effect
Inflation shock
Intermediate Goods
decreases increases
27. Unicorporated entity that has shared ownership.
Fractional
Partnership
Inflationary gap
Planned aggregate expenditure (PAE)
28. Legal entity that has received a charter from a state or federal government.
Output gap
Normative analysis
Automatic stabilizers
Corporation
29. When inflation suddenly deviates from its normal course.
Equilibrium price
Participation rate
Inflation shock
Policy reaction function
30. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Sole proprietorship
Congressional budget office
Expansionary policies
Economic efficiency
31. A measure of overall price levels at a specific point in the price index.
Monetarism
Price level
Planned aggregate expenditure (PAE)
Labor productivity
32. The lowest point of the recession
Labor supply
Trough
Keynesian model
Invisible hand
33. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Stabilization policies
Seller's surplus
Trough
Substitution effect
34. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Short run equilibrium output
Seller's surplus
Invisible hand
Gross National Product (GNP)
35. The time between the need for a macroeconomic policy and its implementation
Real GDP
Inside lag
Monetarism
Capitalism
36. 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.
Relative price
The quality adjustment bias
Automatic stabilizers
The real GDP per person
37. Goods not counted in the nation's GDP.
Relative price
Inflation shock
Standard of living
Intermediate Goods
38. The level of output where output equals planned aggregate expenditure
Exchange
Short run equilibrium output
Outside lag
Peak
39. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Keynesian economic theory
Tangible Assets
Aggregation
Total surplus
40. The international sector emphasizes the ________ rate.
Menu cost
Short run equilibrium output
Laffer curve
Exchange
41. The increase in total benefit that comes from producing one additional unit.
Intermediate goods
Marginal benefit
Normative analysis
Okun's Law
42. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Trough
The rate of inflation
Businesses
The Wealth Effect
43. When the rate of inflation is extremely high.
Hyperinflation
Frictional unemployment
Consumption function
Output gap
44. There is an ___________ ___ when aggregate output is above potential output
Economic efficiency
Velocity
Inflationary gap
Invisible hand
45. A Scottish man (1723-1790) who is known as the father of modern economics.
Structural unemployment
Relative price
Capital goods
Adam Smith
46. An increase in spending due to a perceived increase in wealth.
Sole proprietorship
Gross Domestic Product (GDP)
Quantity equation
The Wealth Effect
47. When the people believe that the nation's central bank will keep inflation rates low.
Intermediate Goods
Credibility of monetary policy
Labor productivity
Rationing
48. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Participation rate
decreases increases
Socially optimal quantity
Real GDP
49. The monetary sector focuses on the ________ rate.
Capitalism
Nominal GDP
NRU
Interest
50. Organizations that act as moderators between employers and employees
Peak
Labor unions
Disinflation
Gross Domestic Product (GDP)