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Test your basic knowledge |
CLEP Macroeconomics - 3
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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 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.
Real employment
Boom
Law of Demand
Capital income
2. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.
Aggregate demand
Peak
Substitution bias
Law of Diminishing Marginal Utility
3. A free market system that relies on private property ownership and supply and demand
Quantity equation
Velocity
Capitalism
Gross National Product (GNP)
4. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Disinflation
Income
Market equilibrium
Gross National Product (GNP)
5. The basic assumption of this model is that in the short run - firms meet demand at present price.
Keynesian model
Core rate of inflation
Seller's surplus
Velocity
6. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.
Okun's Law
Autonomous Expenditure
Boom
The real GDP per person
7. The part of economics study that looks at the operation of a nation's economy as a whole
Substitution bias
Congressional budget office
LRAS
Macroeconomics
8. 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.
Market equilibrium
Tangible Assets
Labor productivity
Law of Supply
9. Real Estate - Equipment - and Cash (physical assets)
Exchange
Sunk cost
Tangible Assets
Cyclical unemployment
10. Legal entity that has received a charter from a state or federal government.
Disinflation
Corporation
Substitution bias
Total surplus
11. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
Marginal tax rate
Aggregate Supply
Asset
Frictional unemployment
12. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Buyer's surplus
Disinflation
Peak
Rationing
13. The increase in total cost that comes from producing one additional unit of a specific good or service.
Monetarism
Marginal cost
Buyer's surplus
Anchored inflation expectations
14. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Tangible Assets
Socially optimal quantity
Unemployment insurance
Credibility of monetary policy
15. The total planned spending on final goods and services.
Laffer curve
Planned aggregate expenditure (PAE)
Short run equilibrium output
Tangible Assets
16. The rate of price increase on all things except food and energy
Keynesian economic theory
Core rate of inflation
Real employment
Phillips curve
17. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Indexing
Corporation
Worker mobility
Labor supply
18. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Substitution effect
Inflation inertia
LRAS
The real GDP per person
19. 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.
Labor unions
Gross Domestic Product (GDP)
Nominal GDP
The principle of efficiency
20. The time between the need for a macroeconomic policy and its implementation
Partnership
Fisher effect
Autonomous Expenditure
Inside lag
21. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Output gap
Aggregate Supply
Automatic stabilizers
Labor productivity
22. 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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23. The adding up of individual economic variables to obtain a large - general picture of the economy.
Okun's Law
Aggregation
Reservation price
Labor supply
24. Money multiplied by velocity equals nominal GDP.
Corporation
The quality adjustment bias
Planned aggregate expenditure (PAE)
Quantity equation
25. Government policies aimed at stabilizing the economy by eliminating output gaps
Real employment
Stabilization policies
Seller's surplus
Aggregate demand
26. Goods not counted in the nation's GDP.
Law of Demand
Marginal benefit
Intermediate Goods
Labor unions
27. Describes how the economy directly effects the actions policymakers take.
Congressional budget office
NRU
Labor unions
Policy reaction function
28. The degree to which people have access to goods and services that make their lives better.
Substitution effect
Inflation shock
Standard of living
Potential output
29. The level of output where output equals planned aggregate expenditure
decreases increases
Law of Demand
Inflation
Short run equilibrium output
30. Total tax paid divided by total (taxable) income - as a percentage.
Substitution bias
Phillips curve
Average tax rate
Law of Diminishing Marginal Utility
31. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
The principle of efficiency
Mixed market
Cyclical unemployment
decreases increases
32. 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
Saving
Substitution bias
Autonomous Expenditure
Short run equilibrium output
33. Concerned with analyzing whether or not a policy should be used.
Aggregate supply
Marginal cost
Indexing
Normative analysis
34. Business entity which legally has no separate existence from its owner.
Sole proprietorship
Liquidity
Invisible hand
Real GDP
35. The ease with which an asset can be converted to currency.
Planned aggregate expenditure (PAE)
Supply-side policy
Frictional unemployment
Liquidity
36. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Price
Consumption
Fractional
Structural unemployment
37. When people's expectations of future inflation do not change even though inflation rates change.
Phillips curve
Aggregate Supply
Anchored inflation expectations
Pay
38. Government policies intended to increase spending and output.
Trough
Expansionary policies
Intermediate goods
Capitalism
39. Used to demonstrate shifts in income distribution among a population over time.
Core rate of inflation
Cyclical unemployment
Lorenz curve
Consumer Nondurables
40. The percentage of working-age people within the labor force
Monetarism
Corporation
Participation rate
Trough
41. Patents - Goodwill - and Trademarks (lack physical substance)
Intangible Assets
Structural unemployment
Policy reaction function
Four sectors of the economy
42. 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).
Frictional unemployment
Velocity
Worker mobility
Liquidity
43. Used in the production of final goods - but instead of being consumed - are available for reuse.
Capital goods
Substitution bias
Disinflation
Complement
44. The rise in taxes that occurs when before-tax income increases by one dollar
Marginal tax rate
Recession
Intermediate Goods
Nominal GDP
45. The real cost of changing a listed price.
Price level
Menu cost
Adam Smith
Command economic system
46. The labor sector highlights the rate of ____ .
Pay
Inflation shock
Capitalism
Tangible Assets
47. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Marginal cost
Indexing
Total surplus
Corporation
48. The annual percentage rate of change in price level reflected by price indexes
decreases increases
The rate of inflation
Seller's surplus
Sole proprietorship
49. The government office that is responsible for projecting federal surpluses and deficits
Congressional budget office
Inside lag
Fractional
Credibility of monetary policy
50. A policy that affects potential output
Marginal cost
Supply-side policy
Saving
Intangible Assets