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






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






3. When an economic unit makes more than it spends






4. Money multiplied by velocity equals nominal GDP.






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






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






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






8. The annual percentage rate of change in price level reflected by price indexes






9. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation






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






11. The speed that money changes hands in order to buy and sell final goods and services.






12. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.






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






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






15. The movement of workers between jobs - companies - and industries






16. The price of a good or service in relation to the price of other goods and services.






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






18. 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.






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






20. Total supply of goods and services in an economy






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






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






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






24. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.






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






26. The rise in taxes that occurs when before-tax income increases by one dollar






27. The output per employed worker






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






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






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






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






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






33. A record of economic increases and decreases over time.






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






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






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






37. The monetary sector focuses on the ________ rate.






38. When the rate of inflation is extremely high.






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






40. There is an ___________ ___ when aggregate output is above potential output






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






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






43. 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.






44. The lowest point of the recession






45. A policy that affects potential output






46. 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






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






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






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.






50. The smallest dollar amount for which a seller would be willing to sell an additional unit - generally equal to marginal cost

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