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Test your basic knowledge |
CLEP Macroeconomics - 3
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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. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Credibility of monetary policy
Normative analysis
Capitalism
decreases increases
2. 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
Total surplus
Law of Supply
AD curve intersects the SAS curve
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.
Free market
Laffer curve
Okun's Law
Law of Diminishing Marginal Utility
4. Business entity which legally has no separate existence from its owner.
Automatic stabilizers
Menu cost
Stabilization policies
Sole proprietorship
5. The continuing increase in the average level of prices of goods and services over time.
Disinflation
Keynesian economic theory
Excess Supply
Inflation
6. 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.
Aggregate demand
Aggregation
Invisible hand
Real employment
7. When inflation suddenly deviates from its normal course.
Law of Diminishing Marginal Utility
The Wealth Effect
Socially optimal quantity
Inflation shock
8. 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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9. The lowest point of the recession
Okun's Law
Consumption
Trough
Gross Domestic Product (GDP)
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.
Labor unions
Lorenz curve
Real employment
Economic efficiency
11. A macroeconomic policy that directly affects the structure and various institutions of an economy
Keynesian economic theory
Structural policy
Recession
Fractional
12. Natural Rate of Unemployment - a rate that will always exist
Liquidity
Tangible Assets
NRU
Aggregate supply shock
13. The time period between a policy's implementation and its desired effects on an economy.
Deflation
Outside lag
Price
Normative analysis
14. Describes how the economy directly effects the actions policymakers take.
Adam Smith
decreases increases
Policy reaction function
Buyer's surplus
15. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Aggregate supply shock
Output gap
Free market
Expansionary policies
16. The amount of workers that are willing to work for a real wage.
Indexing
Monopsony
Aggregate demand
Labor supply
17. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
Keynesian model
Unemployment insurance
Reservation price
AD curve intersects the SAS curve
18. The annual percentage rate of change in price level reflected by price indexes
The rate of inflation
Excess Supply
Capitalism
LRAS
19. Represents the governmental tax rate that will best maximize tax revenues.
Deflation
Inflationary gap
Laffer curve
Real employment
20. Real Estate - Equipment - and Cash (physical assets)
Quantity equation
Tangible Assets
Deflation
The rate of inflation
21. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.
Stabilization policies
The real GDP per person
Inflation shock
Complement
22. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.
Consumption
Trough
Intermediate goods
Saving
23. The adding up of individual economic variables to obtain a large - general picture of the economy.
Intermediate Goods
Peak
Invisible hand
Aggregation
24. 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.
Law of Diminishing Marginal Utility
Automatic stabilizers
Labor supply
Hyperinflation
25. The maximum amount that an economy can output over a period of time
Potential output
Consumer Nondurables
Congressional budget office
Rationing
26. The slow change in inflation from year to year in industrialized nations
Inflation inertia
Potential output
Substitution effect
Reservation price
27. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
The rate of inflation
Socially optimal quantity
Indexing
Free market
28. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Substitution effect
Buyer's surplus
Structural unemployment
Gross Domestic Product (GDP)
29. The international sector emphasizes the ________ rate.
Participation rate
The Wealth Effect
Exchange
Capital goods
30. Goods not counted in the nation's GDP.
Law of Demand
Free market
Intermediate Goods
Okun's Law
31. 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.
Short run equilibrium output
Consumption
Contractionary policies
Substitution effect
32. Goods that are used in the production of final goods.
Capitalism
Intermediate goods
Price level
Trough
33. The level of output where output equals planned aggregate expenditure
Price level
Short run equilibrium output
The real GDP per person
Congressional budget office
34. 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.
Partnership
Law of Supply
Seller's reservation price
Congressional budget office
35. Extreme economic growth
Boom
Outside lag
Output gap
The principle of efficiency
36. Goods and services sector - Labor sector - monetary sector - international sector.
Reservation price
Labor productivity
Four sectors of the economy
Trough
37. (n) something of value; a resource; an advantage
Asset
Consumption function
Fractional
Invisible hand
38. The ease with which an asset can be converted to currency.
Liquidity
Short run equilibrium output
Normative analysis
Output gap
39. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Gross National Product (GNP)
The quality adjustment bias
Adam Smith
Contractionary policies
40. The time between the need for a macroeconomic policy and its implementation
Frictional unemployment
Complement
Inflationary gap
Inside lag
41. The speed that money changes hands in order to buy and sell final goods and services.
Invisible hand
Labor productivity
Velocity
Aggregate supply
42. Payments that the government makes to unemployed workers.
Unemployment insurance
Policy reaction function
Indexing
Invisible hand
43. Unicorporated entity that has shared ownership.
The quality adjustment bias
Indexing
Partnership
Aggregate supply
44. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Planned aggregate expenditure (PAE)
Rationing
The real GDP per person
Deflation
45. The government office that is responsible for projecting federal surpluses and deficits
Congressional budget office
Buyer's surplus
Saving
Autonomous Expenditure
46. 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.
Short run equilibrium output
Reservation price
Marginal tax rate
Command economic system
47. Used in the production of final goods - but instead of being consumed - are available for reuse.
Businesses
Capital goods
Capital income
Free market
48. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Short run equilibrium output
Deflation
Inflation
Substitution effect
49. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Consumption function
Capital income
Planned aggregate expenditure (PAE)
Complement
50. Caused by changes in the overall economy.
Cyclical unemployment
Participation rate
Complement
LRAS