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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. The slow change in inflation from year to year in industrialized nations






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






3. 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






4. Concerned with analyzing whether or not a policy should be used.






5. 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.






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






7. When inflation suddenly deviates from its normal course.






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






9. When the rate of inflation is extremely high.






10. 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






11. Total tax paid divided by total (taxable) income - as a percentage.






12. A policy that affects potential output






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






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






15. Maximum price that a customer is willing to pay for a good






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






17. The speed that money changes hands in order to buy and sell final goods and services.






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






19. Extreme economic growth






20. Organizations that act as moderators between employers and employees






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






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






23. 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.






24. The smallest dollar amount for which a seller would be willing to sell an additional unit - generally equal to marginal cost

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25. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.






26. Used in the production of final goods - but instead of being consumed - are available for reuse.






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






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






29. The goods and services sector focuses largely on the level of ______ .






30. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.






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 level of output where output equals planned aggregate expenditure






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






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






36. A record of economic increases and decreases over time.






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






38. 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.






39. 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.






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






41. The total value of goods and services produced in a country valued at current prices.






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






43. The difference between the price received by the seller and the seller's reservation price

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






45. A free market system that relies on private property ownership and supply and demand






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






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






48. The basic assumption of this model is that in the short run - firms meet demand at present price.






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






50. The time between the need for a macroeconomic policy and its implementation