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Test your basic knowledge |
CLEP Macroeconomics - 3
Start Test
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 difference between the price received by the seller and the seller's reservation price
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2. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Rationing
Unemployment insurance
Substitution bias
Capital goods
3. Total tax paid divided by total (taxable) income - as a percentage.
Automatic stabilizers
Reservation price
Law of Demand
Average tax rate
4. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Labor supply
Seller's reservation price
Socially optimal quantity
Sunk cost
5. Refers to individuals between jobs seeking new employment - people re-entering the workforce (ie mom whose kids are grown) - and new entrants (ie college graduates).
Frictional unemployment
Hyperinflation
Seller's reservation price
Normative analysis
6. 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.
Intangible Assets
Average tax rate
Hyperinflation
Command economic system
7. When the rate of inflation is extremely high.
Substitution effect
Hyperinflation
Monopsony
Laffer curve
8. 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
Equilibrium price
Sunk cost
Interest
Substitution bias
9. When inflation suddenly deviates from its normal course.
Inflation shock
Sunk cost
Peak
Intermediate Goods
10. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made
Marginal benefit
Autonomous Expenditure
Velocity
Sunk cost
11. The real cost of changing a listed price.
Labor unions
Menu cost
The quality adjustment bias
Law of Demand
12. The rate of price increase on all things except food and energy
Contractionary policies
Law of Diminishing Marginal Utility
Core rate of inflation
Seller's surplus
13. 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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14. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Expansionary policies
Price
Labor supply
Standard of living
15. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Anchored inflation expectations
Total surplus
Adam Smith
Gross National Product (GNP)
16. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Phillips curve
Participation rate
Economic efficiency
Potential output
17. Money multiplied by velocity equals nominal GDP.
Potential output
Output gap
Business cycle
Quantity equation
18. The price of a good or service in relation to the price of other goods and services.
Partnership
Law of Diminishing Marginal Utility
Planned aggregate expenditure (PAE)
Relative price
19. Total supply of goods and services in an economy
Quantity equation
Supply-side policy
Aggregate supply
Core rate of inflation
20. The economic theory that states the main cause of change in aggregate output and price level is the result of monetary supply and the interest rate that comes from the amount of monetary supply
Monetarism
Disinflation
The rate of inflation
Price
21. A free market system that relies on private property ownership and supply and demand
Anchored inflation expectations
Labor supply
Capitalism
Laffer curve
22. Goods and services sector - Labor sector - monetary sector - international sector.
Four sectors of the economy
Potential output
The Wealth Effect
The rate of inflation
23. 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.
Substitution effect
Law of Diminishing Marginal Utility
Contractionary policies
Labor unions
24. 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.
Consumption
Gross Domestic Product (GDP)
Mixed market
Intermediate Goods
25. The increase in total cost that comes from producing one additional unit of a specific good or service.
Deflation
Stabilization policies
Output gap
Marginal cost
26. 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.
Outside lag
Automatic stabilizers
Seller's reservation price
Real employment
27. Goods not counted in the nation's GDP.
Intermediate Goods
Intangible Assets
Consumption
Law of Diminishing Marginal Utility
28. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.
Labor supply
Consumption
Market equilibrium
Real quantity
29. A quantity that is measured in real terms - the actual quantity of a good or service
Real quantity
Core rate of inflation
Monopsony
Aggregate supply shock
30. Payments that the government makes to unemployed workers.
Unemployment insurance
Reservation price
Socially optimal quantity
Marginal tax rate
31. The goods and services sector focuses largely on the level of ______ .
Businesses
Buyer's surplus
Income
Quantity equation
32. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).
Phillips curve
Monopsony
Price
The rate of inflation
33. When people's expectations of future inflation do not change even though inflation rates change.
Capital goods
Anchored inflation expectations
Interest
Law of Diminishing Marginal Utility
34. A measure of overall price levels at a specific point in the price index.
Price level
Output gap
Adam Smith
Normative analysis
35. The continuing increase in the average level of prices of goods and services over time.
Short run equilibrium output
Inflation
Contractionary policies
Liquidity
36. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Real GDP
Fisher effect
decreases increases
Disinflation
37. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Aggregate supply
AD curve intersects the SAS curve
Excess Supply
Consumption function
38. When prices fall consistently over time - leading to negative inflation.
Deflation
Consumption
Economic efficiency
Structural unemployment
39. The maximum amount that an economy can output over a period of time
Frictional unemployment
Potential output
Monopsony
Aggregation
40. 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.
Average tax rate
Price
Automatic stabilizers
Keynesian economic theory
41. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
Keynesian model
The quality adjustment bias
Aggregate Supply
Adam Smith
42. Describes how the economy directly effects the actions policymakers take.
Output gap
Fractional
Policy reaction function
Buyer's surplus
43. The annual percentage rate of change in price level reflected by price indexes
Velocity
Inflation
Asset
The rate of inflation
44. An increase in this would cause an increase in the aggregate supply
Macroeconomics
decreases increases
Labor productivity
Excess Supply
45. Patents - Goodwill - and Trademarks (lack physical substance)
Trough
Peak
Intangible Assets
Anchored inflation expectations
46. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Indexing
Output gap
Quantity equation
Policy reaction function
47. The amount of workers that are willing to work for a real wage.
Aggregate demand
Labor supply
Stabilization policies
Excess Supply
48. 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.
Contractionary policies
NRU
Inflation
Credibility of monetary policy
49. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Interest
Policy reaction function
Output gap
Expansionary policies
50. A result of there only being one buyer of a resource input - good - or service.
Participation rate
Monopsony
Boom
Tangible Assets