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Test your basic knowledge |
CLEP Macroeconomics - 3
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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. Represents the governmental tax rate that will best maximize tax revenues.
Pay
Substitution bias
Keynesian economic theory
Laffer curve
2. 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.
Traditional economic system
The principle of efficiency
Planned aggregate expenditure (PAE)
Indexing
3. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Rationing
Consumption
Complement
Monetarism
4. The time period between a policy's implementation and its desired effects on an economy.
Expansionary policies
Frictional unemployment
Four sectors of the economy
Outside lag
5. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Inflationary gap
Liquidity
Invisible hand
Inflation shock
6. The total planned spending on final goods and services.
Traditional economic system
Planned aggregate expenditure (PAE)
Aggregation
AD curve intersects the SAS curve
7. An increase in spending due to a perceived increase in wealth.
The Wealth Effect
Business cycle
Outside lag
Capital income
8. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Fisher effect
Labor supply
Four sectors of the economy
Core rate of inflation
9. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Businesses
Velocity
Saving
Sunk cost
10. The rise in taxes that occurs when before-tax income increases by one dollar
Marginal tax rate
Participation rate
Worker mobility
Equilibrium price
11. A large - unexpected change in the cost of resources.
Phillips curve
Disinflation
Aggregate supply shock
Labor unions
12. A measure of overall price levels at a specific point in the price index.
Supply-side policy
Gross National Product (GNP)
Price level
Labor unions
13. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Output gap
Gross National Product (GNP)
Exchange
Core rate of inflation
14. Patents - Goodwill - and Trademarks (lack physical substance)
The real GDP per person
Four sectors of the economy
Intangible Assets
Cyclical unemployment
15. Government policies aimed at stabilizing the economy by eliminating output gaps
Seller's surplus
Invisible hand
Fisher effect
Stabilization policies
16. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Free market
Pay
Disinflation
Businesses
17. The degree to which people have access to goods and services that make their lives better.
Standard of living
Seller's reservation price
Peak
Macroeconomics
18. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made
Indexing
Marginal benefit
Sunk cost
Monetarism
19. 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).
Law of Diminishing Marginal Utility
Frictional unemployment
Equilibrium price
Fractional
20. The continuing increase in the average level of prices of goods and services over time.
Substitution bias
Inflation
Capital goods
Automatic stabilizers
21. Goods and services sector - Labor sector - monetary sector - international sector.
Standard of living
Four sectors of the economy
Command economic system
Okun's Law
22. A macroeconomic policy that directly affects the structure and various institutions of an economy
Structural policy
Economic efficiency
Traditional economic system
Inflation
23. The output per employed worker
Partnership
Labor productivity
Real employment
Peak
24. 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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25. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Price
Complement
Outside lag
Expansionary policies
26. Real Estate - Equipment - and Cash (physical assets)
Invisible hand
Socially optimal quantity
Tangible Assets
Capital goods
27. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.
Socially optimal quantity
LRAS
Corporation
Aggregate demand
28. The annual percentage rate of change in price level reflected by price indexes
The rate of inflation
Capitalism
Pay
NRU
29. When inflation suddenly deviates from its normal course.
Automatic stabilizers
Equilibrium price
Inflation shock
Normative analysis
30. 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.
Law of Demand
Indexing
Contractionary policies
Aggregation
31. A Scottish man (1723-1790) who is known as the father of modern economics.
Liquidity
Real employment
Keynesian economic theory
Adam Smith
32. Combines pure market and command. Example: Japan
Law of Supply
Keynesian model
Worker mobility
Mixed market
33. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
LRAS
Expansionary policies
Hyperinflation
Equilibrium price
34. When the rate of inflation is extremely high.
Output gap
Hyperinflation
Real quantity
Adam Smith
35. The slow change in inflation from year to year in industrialized nations
Menu cost
Inflation inertia
Price
The quality adjustment bias
36. The maximum amount that an economy can output over a period of time
Inflationary gap
Capitalism
Potential output
Exchange
37. Legal entity that has received a charter from a state or federal government.
Socially optimal quantity
Short run equilibrium output
Anchored inflation expectations
Corporation
38. The adding up of individual economic variables to obtain a large - general picture of the economy.
Aggregation
Four sectors of the economy
Substitution effect
Excess Supply
39. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Intangible Assets
Normative analysis
Indexing
Congressional budget office
40. The difference between the price received by the seller and the seller's reservation price
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41. That efficiency leads to economic prosperity for all.
Lorenz curve
Disinflation
Income
The principle of efficiency
42. 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.
Command economic system
Business cycle
Intangible Assets
AD curve intersects the SAS curve
43. A GDP decline that lasts two-quarters (six months). A period of slow economic growth
Short run equilibrium output
Recession
Partnership
Businesses
44. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Structural unemployment
Equilibrium price
Pay
Seller's surplus
45. The portion of planned aggregate expenditure that is not based on output
Autonomous Expenditure
Invisible hand
Aggregation
Substitution effect
46. Government policies intended to increase spending and output.
Automatic stabilizers
Expansionary policies
Cyclical unemployment
Congressional budget office
47. A record of economic increases and decreases over time.
Consumption
Anchored inflation expectations
Labor supply
Business cycle
48. Used to demonstrate shifts in income distribution among a population over time.
Free market
Business cycle
Lorenz curve
Buyer's surplus
49. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
Phillips curve
Free market
Laffer curve
Real GDP
50. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.
Tangible Assets
The real GDP per person
Sole proprietorship
Corporation