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






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

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3. 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






4. When the people believe that the nation's central bank will keep inflation rates low.






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






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






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






8. When an economic unit makes more than it spends






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






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






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






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






13. Payments that the government makes to unemployed workers.






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






15. 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.






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






17. 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.






18. 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.






19. The part of economics study that looks at the operation of a nation's economy as a whole






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






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






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






23. Combines pure market and command. Example: Japan






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






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






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






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






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






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






30. Represents the governmental tax rate that will best maximize tax revenues.






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






32. The portion of planned aggregate expenditure that is not based on output






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






34. Caused by changes in the overall economy.






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






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






37. That efficiency leads to economic prosperity for all.






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






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






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






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






43. Government policies intended to increase spending and output.






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






45. Refers to individuals between jobs seeking new employment - people re-entering the workforce (ie mom whose kids are grown) - and new entrants (ie college graduates).






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






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






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






49. The labor sector highlights the rate of ____ .






50. 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.







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