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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 tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.






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






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






4. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.






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.






6. Total supply of goods and services in an economy






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






8. The international sector emphasizes the ________ rate.






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






10. When inflation suddenly deviates from its normal course.






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






12. 1 percent more unemployment results in 2 percent less output.

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






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






15. Organizations that act as moderators between employers and employees






16. Extreme economic growth






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






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






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






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






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






23. Payments that the government makes to unemployed workers.






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






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






26. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.






27. 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.






28. The monetary sector focuses on the ________ rate.






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






30. Legal entity that has received a charter from a state or federal government.






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






32. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.






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






34. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply






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






36. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.






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






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






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






40. Caused by changes in the overall economy.






41. The maximum amount that an economy can output over a period of time






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






43. The real cost of changing a listed price.






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






45. 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.






46. 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.






47. The labor sector highlights the rate of ____ .






48. Business entity which legally has no separate existence from its owner.






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






50. The government office that is responsible for projecting federal surpluses and deficits