Test your basic knowledge |

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






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






3. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available






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






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






6. Government policies intended to increase spending and output.






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






8. 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.






9. 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.






10. The monetary sector focuses on the ________ rate.






11. Caused by changes in the overall economy.






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






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






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






15. 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.






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






17. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.






18. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.






19. Short-run macroeconomic equilibrium occurs at the level of GDP where the:






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






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






22. There is an ___________ ___ when aggregate output is above potential output






23. When an economic unit makes more than it spends






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






25. The beginning of a recession






26. That efficiency leads to economic prosperity for all.






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






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






29. The output per employed worker






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






31. The time period between a policy's implementation and its desired effects on an economy.






32. 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.






33. 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.






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






35. When inflation suddenly deviates from its normal course.






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






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






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






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






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






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






42. 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.






43. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.






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






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






46. Extreme economic growth






47. 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.






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






49. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.






50. The degree to which people have access to goods and services that make their lives better.