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CLEP Macroeconomics Basics

Subjects : clep, economics
  • Answer 41 questions in 15 minutes.
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  • Match each statement with the correct term.
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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. At a lower price - people will buy more of a particular good because they do not have to sacrifice other goods at its expense

2. All available resources are making the most valuable contributions to output

3. Curve shifts to right

4. A point of production that is inefficient

5. All resources available being used (land - capital goods - and laborers)

6. A graphical representation of opportunity costs

7. The science of efficiency; concerned with allocating these scarce resources so as to achieve maximum fulfillment of our material wants

8. A communist economy; the government determines what is produced and in what quantities and at what price

9. Curve shifts to right

10. Points on the PPC

11. Most economies are not completely laissez-faire and not completely command - but some mixture

12. Meaning - 'let it be -' this is a term that indicates little government involvement in the economy

13. Goods that satisfy needs or wants immediately and get used up

14. Amount of a good or service that consumers plan to buy in a given period of time and in given conditions

15. The point at which quantity demanded and quantity supplied meet

16. A system of private ownership of resources using free markets and prices to determine economic activity; little government involvement

17. Results when the price is set below the equilibrium price

18. 1) the technique of production; (2) prices of resources needed to produce the good or service; (3) taxes and subsidies; (4) prices of other goods; (5) price expectations; and (6) the number of other sellers in the market.

19. Achieved when society is producing at full employment and full production

20. The amount of good or service that a producer plans to sell in a certain time frame

21. The least costly method of production is being used to produce the desired goods and services

22. (1) the price of the good; (2) the prices of related goods; (3) expected future prices; (4) income; (5) population; and (6) preferences

23. Curve shifts to left

24. Custom and culture define how resources are produced and exchanged and how income is distributed - and technology is viewed as invasive

25. Desires are unlimited - resources are limited.

26. As price rises - the corresponding quantity supplied also rises and likewise when the price falls - the quantity supplied decreases

27. Indicates increasing opportunity costs

28. Results when the price is set above equilibrium price

29. All resources are devoted to society's most desired goods and services

30. Curve shifts to left

31. If a similar good is priced more cheaply - people will buy the cheaper substitute instead of the good itself (Coke - Pepsi; bananas - strawberries)

32. (1) the economy is fully efficient meaning that it is operating at full production and full employment; (2) resources are fixed; (3) technology is fixed; and (4) there are only two products.

33. When something other than price changes a demand - the demand curve shifts left or right

34. When something other than price changes in supply - the supply curve shifts left or right

35. A graphical representation of the boundary between what is attainable and what is not

36. Items that satisfy wants indirectly by facilitating the production of consumer goods; economic growth is dictated by a society's production of capital goods

37. Indicates economic growth (society found more resources or developed better technology)

38. Slopes downward

39. The higher the price - the lower the quantity demanded. the lower the price - the higher the quantity demanded.

40. The amount of products that must be forgone in order to obtain an additional unit of any given product

41. A point of production that is unattainable