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Test your basic knowledge |
CLEP Macroeconomics: National Income And Price Determination
Start Test
Study First
Subjects
:
clep
,
economics
Instructions:
Answer 46 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. Economic growth
right-ward shift of SAS
consumption expenditure
increases
aggregate quantity
2. Slopes downward
wealth effect
fiscal policy
AD curve
SAS
3. Increase in long-term growth
equation for MPC
increase in potential GDP
fluctuation in AD brings fluctuation in...
break even income level
4. The quantity of real GDP demanded equals the quantity of real GDP supplied
short-run equilibrium
consumption function
stagflation
consumption expenditure
5. When AD increases - the price level ________.
movement along vertical LAS
increase in potential GDP
increases
factors that cause shifts in AD curve
6. Relationship between consumption expenditure and disposable income
consumption function
LAS
inflationary gap
short-run equilibrium
7. The government's attempt to influence the economy by setting and changing taxes - transfer payments - and expenditures on goods and services
fiscal policy
equation for MPC
marginal propensity to save (MPS)
SAS
8. A persistent increase in aggregate demand that exceeds the increase in potential GDP
inflation is a result of...
aggregate supply
increase in potential GDP
1
9. A rise in the price level at a constant money wage rate brings a change in employment and real GDP and a movement along the ___ curve.
left
recessionary gap
SAS
leftward shift of SAS
10. When the money wage rate rises - the SAS curve shifts ____ but the LAS curve remains unchanged.
decrease
fiscal policy
1
left
11. A rise in resource costs (labor - fuel - material - etc) will _______ SAS.
decrease
break even income level
marginal propensity to save (MPS)
right
12. Relationship between saving and disposable income
shift
right-ward shift of SAS
saving function
equation for saving function
13. The relationship between the quantity of real GDP supplied and the price level when real GDP equals potential GDP; potential GDP is real GDP when all the economy's labor - capital - land - and entrepreneurial ability are fully employed
consumption expenditure
long-run aggregate supply
break even income level
inflationary gap
14. Equilibrium real GDP is below potential GDP
recessionary gap
1
slope of consumption function is equal to...
equation for saving function
15. Job expectations - fiscal or monetary policy - world economy - inflation - profits
left
leftward shift of SAS
factors that cause shifts in AD curve
vertical LAS
16. The fraction of a change in disposable income that is saved
equation for MPC
consumption expenditure
marginal propensity to save (MPS)
saving function
17. When potential GDP increases - both LAS and SAS curves shift _____.
left
right
right-ward shift of SAS
decrease
18. Tendency for increases in the price level to lower the purchasing power of assets of financial assets and reduce total spending in the economy
wealth effect
increase in potential GDP
increases
shift
19. Equilibrium real GDP exceeds potential GDP
inflationary gap
marginal propensity to save (MPS)
long-run aggregate supply
increases
20. Economic slowdown
long-run aggregate supply
stagflation
aggregate quantity
leftward shift of SAS
21. The value of consumption goods and services bought by households
consumption expenditure
consumption function
right-ward shift of SAS
marginal propensity to consume (MPC)
22. When Short Run Aggregate Supply decreases - Real GDP falls below Potential GDP and the price level _________.
factors that cause shifts in AD curve
aggregate quantity
recessionary gap
increases
23. The ratio of change in consumption to change in income
inflationary gap
marginal propensity to consume (MPC)
wealth effect
1
24. The relationship between the quantity of real GDP supplied and the price level when the money wage rate and all other influences on production plans remain constant
short-run aggregate supply
marginal propensity to save (MPS)
equation for MPS
SAS
25. A non-price related change causes a _____ in the demand curve
consumption expenditure
short-run aggregate supply
shift
vertical LAS
26. MPC + MPS
increases
1
marginal propensity to consume (MPC)
vertical LAS
27. The change in savings divided by the change in disposable income
leftward shift of SAS
increases
equation for MPS
break even income level
28. A rise in both the price level and the money wage rate that maintains full employment brings a movement along the ____ curve.
stagflation
LAS
equation for MPS
left
29. Price levels rise due to a decrease in Short Run Aggregate Supply
stagflation
AD curve
fiscal policy
saving function
30. The point on a consumption function where the consumption line intersects the 45 degree line
break even income level
right-ward shift of SAS
equation for MPC
inflation is a result of...
31. When AD increases - real GDP __________.
long-run aggregate supply
increases
aggregate demand
fiscal policy
32. Real GDP and around potential GDP
fluctuation in AD brings fluctuation in...
long-run aggregate supply
surplus
increases
33. Decrease in AD
consumption expenditure
shift to left
equation for saving function
equation for MPS
34. People change consumption preferences daily between domestic goods and services and foreign goods and services
substitution effect
aggregate supply
shift to left
LAS
35. Change in consumption expenditure divided by the change in disposable income
LAS
equation for MPC
long-run aggregate supply
right
36. Potential GDP
vertical LAS
fiscal policy
equation for MPS
substitution effect
37. Sum of the quantities of all the final goods produced in the economy
saving function
aggregate quantity
marginal propensity to consume (MPC)
inflationary gap
38. Increase in AD
marginal propensity to save (MPS)
AD curve
shift to right
fiscal policy
39. Price level exceeds equilibrium price
short-run aggregate supply
increases
surplus
substitution effect
40. The government's attempt to influence the economy by setting and changing interest rates - the exchange rate - and the quantity of money
inflationary gap
monetary policy
saving function
leftward shift of SAS
41. Disposable Income (DI) = Consumption(C) + Saving Consumption (S)
equation for MPC
short-run aggregate supply
equation for saving function
1
42. Relationship between the quantity of real GDP demanded and the price level
movement along vertical LAS
recessionary gap
marginal propensity to save (MPS)
aggregate demand
43. The relationship between the quantity of real GDP supplied and the price level
monetary policy
leftward shift of SAS
aggregate supply
decrease
44. Increased AD brings a(n) ___________ in SAS.
shift to right
decrease
increases
increase in potential GDP
45. MPC
increases
slope of consumption function is equal to...
stagflation
marginal propensity to consume (MPC)
46. Indicates simultaneous change in price level and money wage rate
slope of consumption function is equal to...
fluctuation in AD brings fluctuation in...
movement along vertical LAS
wealth effect