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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. (n) something of value; a resource; an advantage






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






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






4. Government policies intended to increase spending and output.






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






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






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






8. 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.






9. Patents - Goodwill - and Trademarks (lack physical substance)






10. 1 percent more unemployment results in 2 percent less output.

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






12. 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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13. A Scottish man (1723-1790) who is known as the father of modern economics.






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






15. 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.






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






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






18. That efficiency leads to economic prosperity for all.






19. The real cost of changing a listed price.






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






21. A policy that affects potential output






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






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






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






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






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






27. The relationship between disposable income and spending on consumable goods and services






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






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






30. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation






31. The level of output where output equals planned aggregate expenditure






32. The rise in taxes that occurs when before-tax income increases by one dollar






33. The lowest point of the recession






34. Money multiplied by velocity equals nominal GDP.






35. Unicorporated entity that has shared ownership.






36. Government policies aimed at stabilizing the economy by eliminating output gaps






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






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






39. 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.






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






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






42. When people's expectations of future inflation do not change even though inflation rates change.






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






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






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






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






47. The amount of workers that are willing to work for a real wage.






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






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






50. A large - unexpected change in the cost of resources.