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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. Concerned with analyzing whether or not a policy should be used.






3. 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.






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






5. 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.






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






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






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






9. Payments that the government makes to unemployed workers.






10. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.






11. 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.






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






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






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






15. The total value of goods and services produced in a country valued at current prices.






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






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






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






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






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






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

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22. 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






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






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






25. That efficiency leads to economic prosperity for all.






26. When people's expectations of future inflation do not change even though inflation rates change.






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






28. 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.






29. The slow change in inflation from year to year in industrialized nations






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






31. Programs and economic policies such as income taxes - unemployment insurance and TANF (Temporary Aid to Needy Families) that are automatically in place - help to decrease fluctuations in the GDP.






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






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






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






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






36. When the people believe that the nation's central bank will keep inflation rates low.






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






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






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






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






41. 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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42. The output per employed worker






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






44. 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.






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






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






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






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






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






50. The maximum amount that an economy can output over a period of time