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






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






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






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






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






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






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






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






10. In a traditional economic system - the availability of resources is based on inheritance. Goods are only produced for consumption and surpluses do not occur. This type of economy is normally found in South American - Asian - and African countries.






11. 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.






12. The time between the need for a macroeconomic policy and its implementation






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






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






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






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






17. 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.






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






19. The annual percentage rate of change in price level reflected by price indexes






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






21. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.






22. Organizations that act as moderators between employers and employees






23. Government policies aimed at stabilizing the economy by eliminating output gaps






24. Used to demonstrate shifts in income distribution among a population over time.






25. There is an ___________ ___ when aggregate output is above potential output






26. A policy that affects potential output






27. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.






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






29. The monetary sector focuses on the ________ rate.






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






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






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






34. When the rate of inflation is extremely high.






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






36. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).






37. A free market system that relies on private property ownership and supply and demand






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






39. The adding up of individual economic variables to obtain a large - general picture of the economy.






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






41. 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






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






43. 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.






44. 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.






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






46. Patents - Goodwill - and Trademarks (lack physical substance)






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






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






49. A large - unexpected change in the cost of resources.






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