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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. (n) something of value; a resource; an advantage
Asset
Consumption function
The rate of inflation
Free market
2. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Trough
Quantity equation
The real GDP per person
Invisible hand
3. When an economic unit makes more than it spends
Marginal benefit
Interest
Saving
Market equilibrium
4. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Boom
Aggregation
Rationing
Capital goods
5. The real cost of changing a listed price.
Peak
Monopsony
Okun's Law
Menu cost
6. Represents the governmental tax rate that will best maximize tax revenues.
Average tax rate
Laffer curve
Inside lag
The principle of efficiency
7. The time period between a policy's implementation and its desired effects on an economy.
Outside lag
Labor supply
Consumption function
LRAS
8. The price of a good or service in relation to the price of other goods and services.
Seller's reservation price
Boom
Macroeconomics
Relative price
9. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Output gap
Businesses
Lorenz curve
Corporation
10. A quantity that is measured in real terms - the actual quantity of a good or service
Core rate of inflation
Real quantity
The quality adjustment bias
Inflation shock
11. When the rate of inflation is extremely high.
Lorenz curve
Hyperinflation
Intermediate goods
Consumption function
12. 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
Autonomous Expenditure
Substitution bias
Intermediate Goods
Real quantity
13. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Monopsony
Inflation inertia
Structural unemployment
Consumer Nondurables
14. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Standard of living
Contractionary policies
Price
Disinflation
15. An increase in this would cause an increase in the aggregate supply
Equilibrium price
Aggregate supply
Aggregate Supply
Labor productivity
16. Real Estate - Equipment - and Cash (physical assets)
Business cycle
Law of Demand
Tangible Assets
Gross Domestic Product (GDP)
17. The percentage of working-age people within the labor force
Structural policy
The principle of efficiency
Participation rate
NRU
18. When the people believe that the nation's central bank will keep inflation rates low.
Credibility of monetary policy
Indexing
Supply-side policy
Fisher effect
19. When both producers and consumers are satisfied with their quantities at market price.
Market equilibrium
The quality adjustment bias
Worker mobility
Free market
20. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Businesses
Four sectors of the economy
Economic efficiency
Consumer Nondurables
21. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Labor supply
Policy reaction function
Four sectors of the economy
Disinflation
22. The portion of planned aggregate expenditure that is not based on output
Seller's surplus
Automatic stabilizers
Autonomous Expenditure
Menu cost
23. When people's expectations of future inflation do not change even though inflation rates change.
Price
Anchored inflation expectations
The real GDP per person
Planned aggregate expenditure (PAE)
24. A policy that affects potential output
Supply-side policy
Keynesian model
Adam Smith
Capitalism
25. Total tax paid divided by total (taxable) income - as a percentage.
Average tax rate
Marginal cost
Real GDP
Structural policy
26. 1 percent more unemployment results in 2 percent less output.
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27. Legal entity that has received a charter from a state or federal government.
Real employment
Tangible Assets
Corporation
Traditional economic system
28. The output per employed worker
Monopsony
NRU
Real employment
Labor productivity
29. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Capital income
Real employment
Seller's surplus
Traditional economic system
30. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Tangible Assets
Substitution effect
Complement
Keynesian economic theory
31. The speed that money changes hands in order to buy and sell final goods and services.
Congressional budget office
Planned aggregate expenditure (PAE)
Velocity
Consumption function
32. The annual percentage rate of change in price level reflected by price indexes
Labor productivity
The rate of inflation
Excess Supply
The principle of efficiency
33. Maximum price that a customer is willing to pay for a good
Reservation price
Monetarism
Deflation
Mixed market
34. 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.
Normative analysis
Free market
Real employment
Traditional economic system
35. The movement of workers between jobs - companies - and industries
Excess Supply
Participation rate
Real employment
Worker mobility
36. Used in the production of final goods - but instead of being consumed - are available for reuse.
Capital goods
AD curve intersects the SAS curve
Liquidity
Invisible hand
37. The rise in taxes that occurs when before-tax income increases by one dollar
Marginal tax rate
Exchange
Buyer's surplus
Trough
38. Most free-market banking systems are based on __________ reserves.
Pay
Capitalism
Real employment
Fractional
39. The increase in total benefit that comes from producing one additional unit.
Law of Diminishing Marginal Utility
Laffer curve
Marginal benefit
AD curve intersects the SAS curve
40. A free market system that relies on private property ownership and supply and demand
Capitalism
The rate of inflation
Inside lag
Intangible Assets
41. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Fisher effect
Menu cost
Inside lag
Total surplus
42. Combines pure market and command. Example: Japan
The rate of inflation
Mixed market
Adam Smith
decreases increases
43. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Law of Diminishing Marginal Utility
Potential output
Rationing
Substitution effect
44. Goods and services sector - Labor sector - monetary sector - international sector.
Four sectors of the economy
Price level
Recession
LRAS
45. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Tangible Assets
Output gap
Total surplus
Quantity equation
46. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
Supply-side policy
AD curve intersects the SAS curve
Partnership
Socially optimal quantity
47. 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.
Command economic system
Equilibrium price
Capital goods
Businesses
48. The rate of price increase on all things except food and energy
Aggregate supply
AD curve intersects the SAS curve
Capitalism
Core rate of inflation
49. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
decreases increases
Unemployment insurance
Price level
Inflation shock
50. The labor sector highlights the rate of ____ .
Sole proprietorship
Pay
Phillips curve
Economic efficiency