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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. When the rate of inflation is extremely high.






2. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.






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






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






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






6. 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).






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






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






9. When both producers and consumers are satisfied with their quantities at market price.






10. The increase in total benefit that comes from producing one additional unit.






11. 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.






12. Natural Rate of Unemployment - a rate that will always exist






13. 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.






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






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






16. Short-run macroeconomic equilibrium occurs at the level of GDP where the:






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






18. In a traditional economic system - the availability of resources is based on inheritance. Goods are only produced for consumption and surpluses do not occur. This type of economy is normally found in South American - Asian - and African countries.






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






20. Most free-market banking systems are based on __________ reserves.






21. The portion of planned aggregate expenditure that is not based on output






22. The lowest point of the recession






23. The rate of price increase on all things except food and energy






24. The percentage of working-age people within the labor force






25. Caused by changes in the overall economy.






26. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.






27. An increase in this would cause an increase in the aggregate supply






28. 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






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






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






31. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .






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






33. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus






34. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.






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






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






37. A GDP decline that lasts two-quarters (six months). A period of slow economic growth






38. The adding up of individual economic variables to obtain a large - general picture of the economy.






39. When an economic unit makes more than it spends






40. Describes how the economy directly effects the actions policymakers take.






41. The ease with which an asset can be converted to currency.






42. The annual percentage rate of change in price level reflected by price indexes






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






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






45. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.






46. Goods like food and clothing that have a short lifespan.






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






48. Used to demonstrate shifts in income distribution among a population over time.






49. 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.






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