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






2. The beginning of a recession






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






4. 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






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






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






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






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






9. 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.






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






11. 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.






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






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






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






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






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






17. A record of economic increases and decreases over time.






18. The time period between a policy's implementation and its desired effects on an economy.






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






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






21. Unicorporated entity that has shared ownership.






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






23. 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.






24. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.






25. A measure of overall price levels at a specific point in the price index.






26. When inflation suddenly deviates from its normal course.






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






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






29. 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.






30. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.






31. 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.






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






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






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






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






36. 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.






37. The labor sector highlights the rate of ____ .






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






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






40. Payments that the government makes to unemployed workers.






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






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






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






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






45. 1 percent more unemployment results in 2 percent less output.

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






47. 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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48. There is an ___________ ___ when aggregate output is above potential output






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






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