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Test your basic knowledge |
CLEP Macroeconomics - 3
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Study First
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. 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.
Traditional economic system
Law of Diminishing Marginal Utility
Relative price
Macroeconomics
2. Goods and services sector - Labor sector - monetary sector - international sector.
Indexing
Fisher effect
Short run equilibrium output
Four sectors of the economy
3. The annual percentage rate of change in price level reflected by price indexes
Liquidity
Short run equilibrium output
The rate of inflation
Outside lag
4. The labor sector highlights the rate of ____ .
Pay
Intangible Assets
Macroeconomics
Complement
5. A policy that affects potential output
Adam Smith
Indexing
decreases increases
Supply-side policy
6. 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.
Inflation
Price
Laffer curve
Law of Demand
7. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
decreases increases
Gross National Product (GNP)
NRU
Trough
8. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.
Liquidity
The real GDP per person
Boom
Quantity equation
9. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Average tax rate
Excess Supply
Anchored inflation expectations
Policy reaction function
10. Extreme economic growth
Outside lag
Free market
Boom
Hyperinflation
11. Goods that are used in the production of final goods.
Business cycle
Seller's reservation price
Intermediate goods
Monetarism
12. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
Substitution effect
Unemployment insurance
Free market
Keynesian economic theory
13. 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
Inflationary gap
Aggregation
Real GDP
Law of Supply
14. The output per employed worker
Output gap
Liquidity
Gross Domestic Product (GDP)
Labor productivity
15. Maximum price that a customer is willing to pay for a good
The Wealth Effect
Labor unions
Policy reaction function
Reservation price
16. There is an ___________ ___ when aggregate output is above potential output
Contractionary policies
decreases increases
Inflationary gap
Laffer curve
17. Total tax paid divided by total (taxable) income - as a percentage.
Average tax rate
Excess Supply
Labor supply
Core rate of inflation
18. A quantity that is measured in real terms - the actual quantity of a good or service
Real quantity
Supply-side policy
Capitalism
Consumption function
19. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Law of Supply
Deflation
Total surplus
Consumer Nondurables
20. 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
Adam Smith
Phillips curve
The real GDP per person
Monetarism
21. Patents - Goodwill - and Trademarks (lack physical substance)
Recession
Relative price
Substitution effect
Intangible Assets
22. 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
Market equilibrium
Inflation shock
Seller's reservation price
Substitution bias
23. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
Aggregate Supply
Okun's Law
Labor productivity
Businesses
24. 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.
Frictional unemployment
Contractionary policies
Normative analysis
Intangible Assets
25. A macroeconomic policy that directly affects the structure and various institutions of an economy
Mixed market
Buyer's surplus
Liquidity
Structural policy
26. Organizations that act as moderators between employers and employees
Labor unions
Worker mobility
Average tax rate
Phillips curve
27. The time period between a policy's implementation and its desired effects on an economy.
Capital income
Outside lag
Price
Monopsony
28. The lowest point of the recession
Buyer's surplus
Average tax rate
Credibility of monetary policy
Trough
29. The degree to which people have access to goods and services that make their lives better.
Fisher effect
Automatic stabilizers
Monopsony
Standard of living
30. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Worker mobility
Price
NRU
Indexing
31. The increase in total cost that comes from producing one additional unit of a specific good or service.
Consumption
Businesses
Fractional
Marginal cost
32. The international sector emphasizes the ________ rate.
Congressional budget office
Exchange
Keynesian economic theory
LRAS
33. Most free-market banking systems are based on __________ reserves.
Fractional
Inflation inertia
Price level
Policy reaction function
34. The ease with which an asset can be converted to currency.
Invisible hand
Liquidity
Aggregate supply shock
Pay
35. The rate of price increase on all things except food and energy
Standard of living
Core rate of inflation
Seller's reservation price
Labor productivity
36. Real Estate - Equipment - and Cash (physical assets)
Tangible Assets
Core rate of inflation
Corporation
Capital income
37. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Expansionary policies
Invisible hand
Inflation inertia
Consumption
38. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Phillips curve
Sole proprietorship
Rationing
Aggregate supply
39. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Partnership
Capital goods
Complement
Relative price
40. The speed that money changes hands in order to buy and sell final goods and services.
Velocity
Worker mobility
Seller's reservation price
Monetarism
41. Natural Rate of Unemployment - a rate that will always exist
NRU
Relative price
Sunk cost
Capitalism
42. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Unemployment insurance
Gross Domestic Product (GDP)
Disinflation
Standard of living
43. (n) something of value; a resource; an advantage
Businesses
Unemployment insurance
Asset
Inside lag
44. An increase in spending due to a perceived increase in wealth.
Price level
Seller's reservation price
The Wealth Effect
Tangible Assets
45. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
AD curve intersects the SAS curve
Mixed market
Income
Labor supply
46. Goods like food and clothing that have a short lifespan.
The rate of inflation
Consumer Nondurables
Anchored inflation expectations
Contractionary policies
47. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.
Seller's reservation price
Consumption
Business cycle
Aggregate Supply
48. The goods and services sector focuses largely on the level of ______ .
Velocity
Inflationary gap
Aggregate supply shock
Income
49. 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.
Equilibrium price
The principle of efficiency
Average tax rate
Market equilibrium
50. The relationship between disposable income and spending on consumable goods and services
Consumption function
Potential output
Asset
Keynesian model