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CLEP Macroeconomics - 3

Subjects : clep, economics
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.

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

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

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

5. 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.

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

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

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

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

10. The smallest dollar amount for which a seller would be willing to sell an additional unit - generally equal to marginal cost

11. The international sector emphasizes the ________ rate.

12. The difference between a buyer's reservation price (the price they want to pay) and the actual price paid for a good or service

13. 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.

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

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

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

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

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

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

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

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

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

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

24. 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.

25. When the rate of inflation is extremely high.

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

27. Used in the production of final goods - but instead of being consumed - are available for reuse.

28. 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.

29. Government policies intended to increase spending and output.

30. Used to demonstrate shifts in income distribution among a population over time.

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

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

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

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

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

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

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

38. The labor sector highlights the rate of ____ .

39. A result of there only being one buyer of a resource input - good - or service.

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

41. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.

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

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

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

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

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

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

48. 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.

49. Payments that the government makes to unemployed workers.

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