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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. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Capital income
Law of Diminishing Marginal Utility
Sole proprietorship
Marginal benefit
2. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Invisible hand
Supply-side policy
Price
Participation rate
3. Legal entity that has received a charter from a state or federal government.
Tangible Assets
Corporation
Relative price
Real quantity
4. The amount of workers that are willing to work for a real wage.
Stabilization policies
Labor supply
Relative price
Excess Supply
5. When people's expectations of future inflation do not change even though inflation rates change.
Buyer's surplus
Anchored inflation expectations
AD curve intersects the SAS curve
Labor supply
6. The annual percentage rate of change in price level reflected by price indexes
Sunk cost
Relative price
Expansionary policies
The rate of inflation
7. 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.
Credibility of monetary policy
Automatic stabilizers
Interest
Okun's Law
8. Extreme economic growth
Free market
Boom
The rate of inflation
AD curve intersects the SAS curve
9. A record of economic increases and decreases over time.
Boom
Capital income
Market equilibrium
Business cycle
10. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
Boom
Inflationary gap
Monopsony
AD curve intersects the SAS curve
11. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Traditional economic system
Invisible hand
The real GDP per person
Total surplus
12. 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.
Gross Domestic Product (GDP)
Cyclical unemployment
Capital income
Contractionary policies
13. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made
Real GDP
Monopsony
Sunk cost
Rationing
14. Organizations that act as moderators between employers and employees
Labor unions
Seller's surplus
Rationing
Price
15. 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.
Disinflation
Outside lag
Rationing
Real employment
16. Describes how the economy directly effects the actions policymakers take.
Interest
Labor unions
Policy reaction function
The principle of efficiency
17. Most free-market banking systems are based on __________ reserves.
Monopsony
NRU
Planned aggregate expenditure (PAE)
Fractional
18. Total tax paid divided by total (taxable) income - as a percentage.
Aggregate demand
Equilibrium price
Average tax rate
Trough
19. A macroeconomic policy that directly affects the structure and various institutions of an economy
Fisher effect
Structural policy
Macroeconomics
Fractional
20. Payments that the government makes to unemployed workers.
Aggregate demand
Macroeconomics
Unemployment insurance
Consumption
21. Money multiplied by velocity equals nominal GDP.
Real quantity
Intangible Assets
Traditional economic system
Quantity equation
22. The ease with which an asset can be converted to currency.
Liquidity
Income
Monetarism
Phillips curve
23. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.
Interest
Consumption
Capital goods
Planned aggregate expenditure (PAE)
24. The speed that money changes hands in order to buy and sell final goods and services.
Velocity
Reservation price
Interest
Frictional unemployment
25. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Cyclical unemployment
Invisible hand
Four sectors of the economy
Indexing
26. Goods and services sector - Labor sector - monetary sector - international sector.
Short run equilibrium output
Cyclical unemployment
Four sectors of the economy
NRU
27. The basic assumption of this model is that in the short run - firms meet demand at present price.
Keynesian model
Aggregate supply
Consumer Nondurables
Indexing
28. Goods not counted in the nation's GDP.
Business cycle
Intermediate Goods
The principle of efficiency
Phillips curve
29. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Aggregate Supply
Average tax rate
Law of Supply
Economic efficiency
30. The increase in total cost that comes from producing one additional unit of a specific good or service.
Consumption
LRAS
Marginal cost
Automatic stabilizers
31. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.
Excess Supply
Normative analysis
The real GDP per person
Asset
32. The monetary sector focuses on the ________ rate.
LRAS
Short run equilibrium output
Interest
Output gap
33. Government policies aimed at stabilizing the economy by eliminating output gaps
Stabilization policies
Pay
Traditional economic system
NRU
34. The output per employed worker
Complement
Short run equilibrium output
Normative analysis
Labor productivity
35. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
Substitution bias
Aggregate Supply
Indexing
Peak
36. The rise in taxes that occurs when before-tax income increases by one dollar
Total surplus
Intangible Assets
Capital income
Marginal tax rate
37. The level of output where output equals planned aggregate expenditure
Aggregation
Short run equilibrium output
Trough
NRU
38. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Buyer's surplus
Planned aggregate expenditure (PAE)
Keynesian economic theory
Price level
39. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Gross National Product (GNP)
Marginal benefit
Credibility of monetary policy
Partnership
40. Goods like food and clothing that have a short lifespan.
Cyclical unemployment
Velocity
Capital income
Consumer Nondurables
41. Goods that are used in the production of final goods.
Interest
Intermediate goods
Saving
Autonomous Expenditure
42. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
Four sectors of the economy
Adam Smith
The quality adjustment bias
Average tax rate
43. 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.
Labor productivity
Contractionary policies
Law of Demand
Structural policy
44. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Aggregate Supply
decreases increases
Cyclical unemployment
Four sectors of the economy
45. The total value of goods and services produced in a country valued at current prices.
Nominal GDP
Real employment
Output gap
Hyperinflation
46. 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.
Capital goods
Aggregate supply shock
Interest
Law of Demand
47. 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).
Saving
Frictional unemployment
Structural unemployment
Reservation price
48. A GDP decline that lasts two-quarters (six months). A period of slow economic growth
Inflation inertia
Unemployment insurance
Fisher effect
Recession
49. 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.
Inflation shock
Law of Diminishing Marginal Utility
Intangible Assets
Normative analysis
50. 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
Marginal benefit
Equilibrium price
Substitution bias
Inflation shock