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






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






3. The output per employed worker






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






5. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.






6. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.






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






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






9. The real cost of changing a listed price.






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






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.






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.






13. A macroeconomic policy that directly affects the structure and various institutions of an economy






14. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)






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






16. The labor sector highlights the rate of ____ .






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






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






19. Real Estate - Equipment - and Cash (physical assets)






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






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.






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.






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






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






25. Natural Rate of Unemployment - a rate that will always exist






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






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.






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






29. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus






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.






31. An increase in this would cause an increase in the aggregate supply






32. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.






33. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.






34. The percentage of working-age people within the labor force






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






36. Total tax paid divided by total (taxable) income - as a percentage.






37. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.






38. When an economic unit makes more than it spends






39. Extreme economic growth






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






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






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.






43. A result of there only being one buyer of a resource input - good - or service.






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






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 .






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.






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






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






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






50. The beginning of a recession