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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. Goods like food and clothing that have a short lifespan.
Consumer Nondurables
Real quantity
Hyperinflation
Law of Demand
2. Maximum price that a customer is willing to pay for a good
Output gap
Consumption function
Reservation price
Structural policy
3. Combines pure market and command. Example: Japan
Fractional
Real employment
Adam Smith
Mixed market
4. When both producers and consumers are satisfied with their quantities at market price.
Liquidity
Contractionary policies
Exchange
Market equilibrium
5. The total value of goods and services produced in a country valued at current prices.
Adam Smith
Law of Demand
Nominal GDP
Interest
6. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Fractional
Consumer Nondurables
Congressional budget office
Fisher effect
7. The movement of workers between jobs - companies - and industries
Excess Supply
Indexing
Worker mobility
NRU
8. Goods that are used in the production of final goods.
Intermediate goods
Marginal tax rate
Businesses
Credibility of monetary policy
9. An increase in this would cause an increase in the aggregate supply
Labor productivity
Capitalism
Policy reaction function
Complement
10. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Supply-side policy
Congressional budget office
Marginal tax rate
Invisible hand
11. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Aggregate supply shock
Excess Supply
Indexing
Partnership
12. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
The principle of efficiency
Total surplus
Capital income
Consumer Nondurables
13. Concerned with analyzing whether or not a policy should be used.
The rate of inflation
Gross National Product (GNP)
Normative analysis
Labor unions
14. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Contractionary policies
Complement
Frictional unemployment
Capital income
15. Gross domestic product adjusted for inflation; gross domestic product in a year divided by the GDP price index for that year - the index expressed as a decimal
Supply-side policy
Contractionary policies
Real GDP
Keynesian model
16. A result of there only being one buyer of a resource input - good - or service.
Labor productivity
Labor productivity
Monopsony
Fisher effect
17. (n) something of value; a resource; an advantage
Income
Unemployment insurance
Reservation price
Asset
18. The part of economics study that looks at the operation of a nation's economy as a whole
Menu cost
Macroeconomics
Marginal cost
Aggregate Supply
19. Patents - Goodwill - and Trademarks (lack physical substance)
Exchange
Aggregate supply shock
Intangible Assets
Aggregate demand
20. A GDP decline that lasts two-quarters (six months). A period of slow economic growth
Recession
Aggregate supply
Free market
NRU
21. Caused by changes in the overall economy.
Monopsony
Inflation
Cyclical unemployment
Buyer's surplus
22. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Substitution effect
Menu cost
Consumer Nondurables
Recession
23. 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
Monetarism
AD curve intersects the SAS curve
Asset
Structural unemployment
24. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Sunk cost
Aggregation
Marginal benefit
Output gap
25. Extreme economic growth
Output gap
Boom
Marginal tax rate
Liquidity
26. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Unemployment insurance
Expansionary policies
Sunk cost
Businesses
27. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
Nominal GDP
Capital income
Four sectors of the economy
AD curve intersects the SAS curve
28. The ease with which an asset can be converted to currency.
Aggregate Supply
Quantity equation
Liquidity
Aggregation
29. The goods and services sector focuses largely on the level of ______ .
Aggregate supply shock
Capital goods
The real GDP per person
Income
30. The degree to which people have access to goods and services that make their lives better.
Consumer Nondurables
Potential output
Law of Demand
Standard of living
31. 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
Substitution bias
Macroeconomics
The principle of efficiency
Interest
32. The international sector emphasizes the ________ rate.
Exchange
Average tax rate
LRAS
Stabilization policies
33. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Saving
Law of Demand
Command economic system
Disinflation
34. 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.
Expansionary policies
Automatic stabilizers
Credibility of monetary policy
Businesses
35. Unicorporated entity that has shared ownership.
Businesses
Partnership
The real GDP per person
Congressional budget office
36. A free market system that relies on private property ownership and supply and demand
Capitalism
Velocity
Capital income
Sole proprietorship
37. Goods not counted in the nation's GDP.
The rate of inflation
Fractional
Intermediate Goods
The Wealth Effect
38. A Scottish man (1723-1790) who is known as the father of modern economics.
Adam Smith
NRU
Structural policy
Rationing
39. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).
Adam Smith
Gross Domestic Product (GDP)
Exchange
Phillips curve
40. The rise in taxes that occurs when before-tax income increases by one dollar
Monopsony
Partnership
Structural unemployment
Marginal tax rate
41. The basic assumption of this model is that in the short run - firms meet demand at present price.
Keynesian model
Intermediate goods
Inflation shock
Socially optimal quantity
42. 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.
Contractionary policies
Inflation inertia
Inside lag
Real employment
43. Describes how the economy directly effects the actions policymakers take.
Reservation price
Real quantity
Indexing
Policy reaction function
44. The level of output where output equals planned aggregate expenditure
Short run equilibrium output
Aggregation
Cyclical unemployment
Reservation price
45. The slow change in inflation from year to year in industrialized nations
Inflation inertia
Deflation
Seller's surplus
Reservation price
46. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Velocity
Four sectors of the economy
Capital income
Inflation inertia
47. 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.
Menu cost
Structural unemployment
Monetarism
Equilibrium price
48. The lowest point of the recession
Trough
Excess Supply
Recession
Congressional budget office
49. Total tax paid divided by total (taxable) income - as a percentage.
Average tax rate
Substitution effect
Normative analysis
Boom
50. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.
Trough
The rate of inflation
Consumer Nondurables
The real GDP per person