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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. 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.

2. The real cost of changing a listed price.

3. The rate of price increase on all things except food and energy

4. A macroeconomic policy that directly affects the structure and various institutions of an economy

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

6. The goods and services sector focuses largely on the level of ______ .

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

8. Combines pure market and command. Example: Japan

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

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

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

12. 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.

13. 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.

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

15. When the rate of inflation is extremely high.

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

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

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

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

20. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply

21. The time between the need for a macroeconomic policy and its implementation

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

23. The increase in total benefit that comes from producing one additional unit.

24. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.

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

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

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

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

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

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

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

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

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

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

35. A policy that affects potential output

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

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

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

39. 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

40. Government policies intended to increase spending and output.

41. 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.

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

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

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

45. 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.

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

47. The international sector emphasizes the ________ rate.

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

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

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