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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. Goods like food and clothing that have a short lifespan.






2. Maximum price that a customer is willing to pay for a good






3. Combines pure market and command. Example: Japan






4. When both producers and consumers are satisfied with their quantities at market price.






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






6. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.






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






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






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






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






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






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






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






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






15. Gross domestic product adjusted for inflation; gross domestic product in a year divided by the GDP price index for that year - the index expressed as a decimal






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






17. (n) something of value; a resource; an advantage






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






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






20. A GDP decline that lasts two-quarters (six months). A period of slow economic growth






21. Caused by changes in the overall economy.






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






23. 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






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






25. Extreme economic growth






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






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






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






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






30. The degree to which people have access to goods and services that make their lives better.






31. 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






32. The international sector emphasizes the ________ rate.






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






34. 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.






35. Unicorporated entity that has shared ownership.






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






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






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






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






40. The rise in taxes that occurs when before-tax income increases by one dollar






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






42. 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.






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






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






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






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






47. 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.






48. The lowest point of the recession






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






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