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CLEP Macroeconomics: Measurement Of Economic Performance - 2

Subjects : clep, economics
  • Answer 50 questions in 15 minutes.
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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. Sizes of MPS and multiplier

2. Expansionary fiscal policy would be used to counteract a _________

3. The average tax rate rises with GDP

4. According to classical theory - demand for this creates unemployment

5. Factors that change domestic imports

6. A deficit that arises out of a recession

7. What changes government expenditure

8. Changes in real GDP DO or DO NOT change domestic exports.

9. An increase in real GDP _________ imports

10. The larger the MPC - the ______ the multiplier

11. Two factors that influence or change investment plans

12. An increase in government expenditures or a decrease in taxes

13. Most economic theory is based on this

14. Dictates rises and falls in consumption expenditure

15. Change in imports divided by the change in real GDP

16. A decrease in government expenditures or an increase in taxes

17. Demand side effects are large; supply side - small

18. The amount by which a change in aggregate expenditure is multiplied to determine the change in equilibrium expenditure and real GDP

19. C + I + G + N - import function

20. According to classical theory - an increase in AD increases the price level but not the level of...

21. A deficit that persists during full employment

22. Inventories remain at their target levels when....

23. The magnitude of the multiplier depends on the ___ _____

24. The time of production during which there are only essentially variable costs

25. (1) Pure competition; (2) Flexible wages and prices; (3) Self-interested motives; (4) People cannot be fooled by money illusions

26. 'Supply creates its own demand.'

27. Spending for the production and accumulation of capital goods and additions to inventory

28. According to Keynesian theory - this is horizontal

29. As real GDP increases - disposable income increases - but by ___ than the increase in real GDP because net taxes also increase.

30. The level of aggregate expenditure when aggregate planned expenditure equals real GDP

31. Contractionary fiscal policy would be used to counteract _________

32. Fiscal Policy changes that increase or decrease equilibrium expenditure will increase or decrease _________ ________.

33. When a fiscal expansion occurs at Potential GDP the Short-Run Aggregate Supply curve (SAS) shifts _____.

34. While investment - government spending - and exports remain constant during changes in the GDP - this kind of expenditure changes with the level of GDP

35. A change in equilibrium expenditure divided by a change in aggregate expenditure

36. The time of production during which there are fixed and variable costs

37. An increase in public debt will have little or no effect on real output or employment because people will choose to save more money

38. Claims that expansionary fiscal policy will increase interest rates and reduce investment

39. According to classical theory - this is vertical

40. A capitalist economy does not tend to employ its resources fully

41. Changes in real GDP DO or DO NOT change investment plans.

42. The part of aggregate planned expenditure that does not change when real GDP changes

43. Appropriate changes in government expenditures that occur naturally

44. The part of aggregate planned expenditure that does change when real GDP changes

45. Real GDP - net taxes

46. Slope of savings function is equal to...

47. Equation for MPC out of real GDP

48. Savings in circular flow diagram is...

49. The government's attempt to influence the economy by setting and changing taxes - transfer payments - and expenditures on goods and services

50. The purchase of foreign goods or services