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CLEP Macroeconomics - 3

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. The price of a good or service in relation to the price of other goods and services.






2. 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






3. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.






4. The annual percentage rate of change in price level reflected by price indexes






5. Government policies aimed at stabilizing the economy by eliminating output gaps






6. There is an ___________ ___ when aggregate output is above potential output






7. The smallest dollar amount for which a seller would be willing to sell an additional unit - generally equal to marginal cost

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8. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.






9. 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.






10. Maximum price that a customer is willing to pay for a good






11. The increase in total cost that comes from producing one additional unit of a specific good or service.






12. Organizations that act as moderators between employers and employees






13. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.






14. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus






15. When inflation suddenly deviates from its normal course.






16. The monetary sector focuses on the ________ rate.






17. Gross domestic product adjusted for inflation; gross domestic product in a year divided by the GDP price index for that year - the index expressed as a decimal






18. In a traditional economic system - the availability of resources is based on inheritance. Goods are only produced for consumption and surpluses do not occur. This type of economy is normally found in South American - Asian - and African countries.






19. The basic assumption of this model is that in the short run - firms meet demand at present price.






20. The degree to which people have access to goods and services that make their lives better.






21. 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.






22. The difference between the price received by the seller and the seller's reservation price

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23. A macroeconomic policy that directly affects the structure and various institutions of an economy






24. Goods and services sector - Labor sector - monetary sector - international sector.






25. The price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time.






26. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available






27. The slow change in inflation from year to year in industrialized nations






28. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.






29. When both producers and consumers are satisfied with their quantities at market price.






30. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.






31. 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.






32. A free market system that relies on private property ownership and supply and demand






33. The government office that is responsible for projecting federal surpluses and deficits






34. Represents the governmental tax rate that will best maximize tax revenues.






35. 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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36. (n) something of value; a resource; an advantage






37. The level of output where output equals planned aggregate expenditure






38. Unicorporated entity that has shared ownership.






39. Goods that are used in the production of final goods.






40. Patents - Goodwill - and Trademarks (lack physical substance)






41. The time between the need for a macroeconomic policy and its implementation






42. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)






43. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply






44. Total tax paid divided by total (taxable) income - as a percentage.






45. Money multiplied by velocity equals nominal GDP.






46. Goods not counted in the nation's GDP.






47. The portion of planned aggregate expenditure that is not based on output






48. A large - unexpected change in the cost of resources.






49. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.






50. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.