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






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






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






4. 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.






5. 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






6. Government policies aimed at stabilizing the economy by eliminating output gaps






7. Goods like food and clothing that have a short lifespan.






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






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






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






11. A policy that affects potential output






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






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






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






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






16. Government policies intended to increase spending and output.






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






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






19. 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






20. When both producers and consumers are satisfied with their quantities at market price.






21. Caused by changes in the overall economy.






22. Real Estate - Equipment - and Cash (physical assets)






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






24. Total supply of goods and services in an economy






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






26. The government office that is responsible for projecting federal surpluses and deficits






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






28. When the rate of inflation is extremely high.






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






30. Combines pure market and command. Example: Japan






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






32. 1 percent more unemployment results in 2 percent less output.

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






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






35. The continuing increase in the average level of prices of goods and services over time.






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






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






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






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






40. The beginning of a recession






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






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






43. 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.






44. 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






45. 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.






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






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






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






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