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






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






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






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






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






6. When the rate of inflation is extremely high.






7. When an economic unit makes more than it spends






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






9. The price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time.






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.






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






12. 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






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






14. 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.






15. The beginning of a recession






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

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






18. Government policies intended to increase spending and output.






19. A policy that affects potential output






20. Caused by changes in the overall economy.






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






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






23. A flaw in the CPI that exaggerates real increases in the cost of living by failing to take into account customers ability to choose equally desirable goods or services when the price of their preferred good or service increases






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






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






26. Money multiplied by velocity equals nominal GDP.






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






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






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






30. 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.






31. 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






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






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






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






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






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






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






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






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






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






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






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






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






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






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






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






48. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.






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






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