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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. The part of economics study that looks at the operation of a nation's economy as a whole
Credibility of monetary policy
Participation rate
Tangible Assets
Macroeconomics
2. The total value of goods and services produced in a country valued at current prices.
Nominal GDP
Indexing
Labor productivity
Consumption function
3. The output per employed worker
Disinflation
Real employment
Aggregate demand
Labor productivity
4. A Scottish man (1723-1790) who is known as the father of modern economics.
Adam Smith
Lorenz curve
Seller's reservation price
Asset
5. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Invisible hand
Laffer curve
Keynesian model
Price level
6. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Congressional budget office
Corporation
AD curve intersects the SAS curve
Price
7. Business entity which legally has no separate existence from its owner.
Consumption
Consumer Nondurables
Sole proprietorship
Income
8. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
Law of Demand
Free market
Expansionary policies
Average tax rate
9. The real cost of changing a listed price.
Menu cost
Deflation
Consumption function
Command economic system
10. Legal entity that has received a charter from a state or federal government.
Output gap
Policy reaction function
Corporation
Average tax rate
11. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Capital income
Gross Domestic Product (GDP)
Aggregate demand
Economic efficiency
12. 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.
Business cycle
LRAS
Indexing
Law of Diminishing Marginal Utility
13. A macroeconomic policy that directly affects the structure and various institutions of an economy
Lorenz curve
Structural policy
Traditional economic system
Labor supply
14. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
AD curve intersects the SAS curve
Output gap
Peak
Aggregate demand
15. The basic assumption of this model is that in the short run - firms meet demand at present price.
Indexing
Aggregate supply
Macroeconomics
Keynesian model
16. The labor sector highlights the rate of ____ .
Intangible Assets
Marginal tax rate
Excess Supply
Pay
17. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
Partnership
Nominal GDP
Real quantity
Aggregate Supply
18. Most free-market banking systems are based on __________ reserves.
Fractional
Labor supply
Command economic system
Aggregate supply shock
19. Real Estate - Equipment - and Cash (physical assets)
Labor productivity
Asset
Tangible Assets
Core rate of inflation
20. The slow change in inflation from year to year in industrialized nations
Inflationary gap
Inflation inertia
Disinflation
Inflation shock
21. 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
Normative analysis
Stabilization policies
Deflation
22. 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.
Unemployment insurance
Automatic stabilizers
Complement
Sole proprietorship
23. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Aggregate Supply
Menu cost
Worker mobility
Complement
24. The increase in total cost that comes from producing one additional unit of a specific good or service.
Marginal cost
Market equilibrium
The quality adjustment bias
Liquidity
25. Natural Rate of Unemployment - a rate that will always exist
Total surplus
NRU
Cyclical unemployment
Aggregate supply
26. The total planned spending on final goods and services.
Planned aggregate expenditure (PAE)
The Wealth Effect
Okun's Law
Contractionary policies
27. 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.
Equilibrium price
Standard of living
Marginal tax rate
Phillips curve
28. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Socially optimal quantity
Phillips curve
Fisher effect
Inflation shock
29. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Sunk cost
Total surplus
Market equilibrium
Monetarism
30. 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.
Law of Demand
Capital income
Seller's reservation price
Business cycle
31. An increase in this would cause an increase in the aggregate supply
Indexing
Labor productivity
Structural unemployment
Command economic system
32. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Businesses
Traditional economic system
Fractional
NRU
33. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Capital income
Price
Expansionary policies
Pay
34. The percentage of working-age people within the labor force
Tangible Assets
Congressional budget office
Intermediate Goods
Participation rate
35. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Capital goods
Price level
Keynesian economic theory
Trough
36. Total tax paid divided by total (taxable) income - as a percentage.
Marginal tax rate
Deflation
Average tax rate
Law of Demand
37. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
Frictional unemployment
Interest
The quality adjustment bias
Law of Demand
38. When an economic unit makes more than it spends
Law of Supply
Saving
The real GDP per person
Peak
39. Extreme economic growth
Inside lag
Boom
Traditional economic system
Gross Domestic Product (GDP)
40. The increase in total benefit that comes from producing one additional unit.
Disinflation
Inside lag
Marginal benefit
Sole proprietorship
41. Represents the governmental tax rate that will best maximize tax revenues.
Asset
Real GDP
Core rate of inflation
Laffer curve
42. Is equal to Consumption + Government Expenditures + Investment + Exports - Imports The market value of all goods and services produced within a nation during a specified amount of time.
Reservation price
Quantity equation
Gross Domestic Product (GDP)
The principle of efficiency
43. A result of there only being one buyer of a resource input - good - or service.
Laffer curve
Free market
Monopsony
Unemployment insurance
44. The government office that is responsible for projecting federal surpluses and deficits
Standard of living
Gross National Product (GNP)
Mixed market
Congressional budget office
45. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
Relative price
LRAS
Policy reaction function
Capitalism
46. 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.
Policy reaction function
Real quantity
Unemployment insurance
Contractionary policies
47. Goods that are used in the production of final goods.
The principle of efficiency
Macroeconomics
Real GDP
Intermediate goods
48. Goods not counted in the nation's GDP.
Adam Smith
Intermediate Goods
Aggregate supply
Equilibrium price
49. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Inflation inertia
Quantity equation
Substitution effect
Participation rate
50. The beginning of a recession
Four sectors of the economy
Peak
Adam Smith
Capital goods