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






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.






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






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






5. The labor sector highlights the rate of ____ .






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






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






8. When the rate of inflation is extremely high.






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






10. 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.






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






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






13. When inflation suddenly deviates from its normal course.






14. 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.






15. Caused by changes in the overall economy.






16. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation






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






18. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .






19. A policy that affects potential output






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






21. 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.






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






23. Short-run macroeconomic equilibrium occurs at the level of GDP where the:






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






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






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






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






28. The level of output where output equals planned aggregate expenditure






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






30. 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.






31. The real cost of changing a listed price.






32. 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.






33. The movement of workers between jobs - companies - and industries






34. The international sector emphasizes the ________ rate.






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






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






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






38. 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).






39. 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






40. Government policies intended to increase spending and output.






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






42. 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.






43. An increase in spending due to a perceived increase in wealth.






44. 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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45. The relationship between disposable income and spending on consumable goods and services






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






47. The speed that money changes hands in order to buy and sell final goods and services.






48. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.






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






50. Unicorporated entity that has shared ownership.