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Test your basic knowledge |
CLEP Macroeconomics - 3
Start Test
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. A free market system that relies on private property ownership and supply and demand
Capitalism
Mixed market
Laffer curve
Price level
2. Concerned with analyzing whether or not a policy should be used.
Normative analysis
Peak
Laffer curve
Inflationary gap
3. A law stating that as a person consumes additional units of a good - eventually the utility gained from each additional unit of the good decreases.
Price level
Command economic system
Tangible Assets
Law of Diminishing Marginal Utility
4. Used in the production of final goods - but instead of being consumed - are available for reuse.
Equilibrium price
Capital goods
Outside lag
Aggregate supply
5. 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.
Law of Demand
Frictional unemployment
Substitution bias
Recession
6. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Corporation
Labor unions
Supply-side policy
Substitution effect
7. (n) something of value; a resource; an advantage
Asset
Mixed market
The rate of inflation
Tangible Assets
8. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Market equilibrium
Real quantity
Structural unemployment
Price
9. Payments that the government makes to unemployed workers.
Tangible Assets
Gross Domestic Product (GDP)
Real quantity
Unemployment insurance
10. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Marginal benefit
Capital goods
Economic efficiency
Unemployment insurance
11. 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.
Aggregate supply shock
Law of Supply
Capitalism
Traditional economic system
12. The amount of workers that are willing to work for a real wage.
Businesses
Labor supply
AD curve intersects the SAS curve
Labor productivity
13. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Peak
Consumer Nondurables
Socially optimal quantity
Marginal cost
14. A record of economic increases and decreases over time.
Total surplus
Business cycle
The rate of inflation
Consumption
15. The total value of goods and services produced in a country valued at current prices.
Relative price
Nominal GDP
Menu cost
Monopsony
16. Describes how the economy directly effects the actions policymakers take.
Anchored inflation expectations
Policy reaction function
Velocity
Structural policy
17. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
Real quantity
Core rate of inflation
Reservation price
Aggregate Supply
18. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
The quality adjustment bias
Free market
Expansionary policies
The rate of inflation
19. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Standard of living
Capital goods
Disinflation
The real GDP per person
20. The goods and services sector focuses largely on the level of ______ .
Asset
Consumption function
Sole proprietorship
Income
21. The difference between a buyer's reservation price (the price they want to pay) and the actual price paid for a good or service
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22. 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
Seller's surplus
Okun's Law
Marginal tax rate
Real GDP
23. The rate of price increase on all things except food and energy
The Wealth Effect
Core rate of inflation
Command economic system
Real quantity
24. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
LRAS
Structural unemployment
Pay
Buyer's surplus
25. That efficiency leads to economic prosperity for all.
Price level
The principle of efficiency
Outside lag
Disinflation
26. When people's expectations of future inflation do not change even though inflation rates change.
Anchored inflation expectations
Capital income
Exchange
Policy reaction function
27. The part of economics study that looks at the operation of a nation's economy as a whole
Income
Planned aggregate expenditure (PAE)
Macroeconomics
Labor productivity
28. When there is no cyclical unemployment and every person who wishes to work is able to find a job at the prevailing rate for wages and in the prevailing working conditions.
Lorenz curve
Real employment
Intermediate Goods
Fisher effect
29. The slow change in inflation from year to year in industrialized nations
Lorenz curve
Inflation inertia
Rationing
Boom
30. The government office that is responsible for projecting federal surpluses and deficits
Structural unemployment
Marginal cost
Rationing
Congressional budget office
31. 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.
Mixed market
Core rate of inflation
Buyer's surplus
Automatic stabilizers
32. The portion of planned aggregate expenditure that is not based on output
Autonomous Expenditure
Disinflation
Seller's surplus
Supply-side policy
33. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Indexing
Outside lag
Standard of living
Average tax rate
34. The increase in total cost that comes from producing one additional unit of a specific good or service.
Rationing
Marginal cost
Inside lag
Planned aggregate expenditure (PAE)
35. The price of a good or service in relation to the price of other goods and services.
Relative price
Substitution effect
Saving
LRAS
36. When the people believe that the nation's central bank will keep inflation rates low.
Credibility of monetary policy
Boom
Deflation
Short run equilibrium output
37. The continuing increase in the average level of prices of goods and services over time.
Substitution effect
Inflation
Socially optimal quantity
Total surplus
38. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Law of Diminishing Marginal Utility
Gross Domestic Product (GDP)
Inflation shock
Rationing
39. A quantity that is measured in real terms - the actual quantity of a good or service
NRU
Equilibrium price
Real quantity
The principle of efficiency
40. Goods that are used in the production of final goods.
Policy reaction function
Gross National Product (GNP)
Partnership
Intermediate goods
41. 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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42. The output per employed worker
Total surplus
Labor productivity
Gross Domestic Product (GDP)
Monopsony
43. An increase in spending due to a perceived increase in wealth.
The Wealth Effect
Interest
Indexing
Pay
44. 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.
Command economic system
Anchored inflation expectations
Hyperinflation
Gross Domestic Product (GDP)
45. The movement of workers between jobs - companies - and industries
Worker mobility
decreases increases
Invisible hand
Short run equilibrium output
46. The increase in total benefit that comes from producing one additional unit.
Fisher effect
Marginal benefit
Consumption function
Socially optimal quantity
47. The ease with which an asset can be converted to currency.
Aggregate demand
Liquidity
Output gap
Price
48. The basic assumption of this model is that in the short run - firms meet demand at present price.
Adam Smith
Keynesian model
Inflation
Gross National Product (GNP)
49. The rise in taxes that occurs when before-tax income increases by one dollar
Participation rate
Output gap
Inflation
Marginal tax rate
50. The maximum amount that an economy can output over a period of time
Command economic system
Income
Potential output
Price