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Test your basic knowledge |
CLEP Macroeconomics - 3
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Study First
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 quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Socially optimal quantity
Standard of living
Four sectors of the economy
Nominal GDP
2. There is an ___________ ___ when aggregate output is above potential output
Interest
Reservation price
Inflationary gap
Law of Diminishing Marginal Utility
3. The international sector emphasizes the ________ rate.
Business cycle
Deflation
Interest
Exchange
4. Programs and economic policies such as income taxes - unemployment insurance and TANF (Temporary Aid to Needy Families) that are automatically in place - help to decrease fluctuations in the GDP.
Contractionary policies
Capitalism
Automatic stabilizers
Inflation inertia
5. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Saving
Outside lag
Complement
Congressional budget office
6. Goods not counted in the nation's GDP.
Macroeconomics
Fisher effect
Gross National Product (GNP)
Intermediate Goods
7. Total supply of goods and services in an economy
Sole proprietorship
Liquidity
Aggregate supply
Structural unemployment
8. The relationship between disposable income and spending on consumable goods and services
Invisible hand
Real quantity
Consumption function
Short run equilibrium output
9. The monetary sector focuses on the ________ rate.
Aggregation
Interest
Normative analysis
Expansionary policies
10. 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.
Asset
Structural unemployment
Unemployment insurance
Real employment
11. The ease with which an asset can be converted to currency.
Liquidity
Law of Diminishing Marginal Utility
Inside lag
Relative price
12. The price of a good or service in relation to the price of other goods and services.
Market equilibrium
Relative price
Unemployment insurance
Frictional unemployment
13. (n) something of value; a resource; an advantage
Asset
Intermediate Goods
Disinflation
Businesses
14. 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.
Substitution bias
Equilibrium price
Consumption function
Intermediate goods
15. The rise in taxes that occurs when before-tax income increases by one dollar
Marginal tax rate
decreases increases
Real quantity
AD curve intersects the SAS curve
16. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Indexing
Short run equilibrium output
Interest
Fisher effect
17. 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 shock
Four sectors of the economy
Laffer curve
18. The labor sector highlights the rate of ____ .
Credibility of monetary policy
Labor supply
Pay
Sunk cost
19. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Frictional unemployment
Price level
Total surplus
Automatic stabilizers
20. The continuing increase in the average level of prices of goods and services over time.
Average tax rate
Inflation
Cyclical unemployment
Complement
21. The degree to which people have access to goods and services that make their lives better.
Gross National Product (GNP)
Excess Supply
Aggregate supply shock
Standard of living
22. Used in the production of final goods - but instead of being consumed - are available for reuse.
Partnership
Labor supply
Capital goods
Inflation inertia
23. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Reservation price
Law of Demand
Corporation
Invisible hand
24. Combines pure market and command. Example: Japan
Deflation
Mixed market
Labor supply
Price
25. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Businesses
Autonomous Expenditure
Structural policy
Labor unions
26. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
Disinflation
Consumption
Free market
Consumer Nondurables
27. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Inflation inertia
Four sectors of the economy
Labor supply
Gross National Product (GNP)
28. Concerned with analyzing whether or not a policy should be used.
Nominal GDP
Disinflation
Participation rate
Normative analysis
29. The increase in total benefit that comes from producing one additional unit.
Marginal benefit
Capital income
Business cycle
Equilibrium price
30. A GDP decline that lasts two-quarters (six months). A period of slow economic growth
Recession
Saving
The quality adjustment bias
Price
31. The economic theory that states the main cause of change in aggregate output and price level is the result of monetary supply and the interest rate that comes from the amount of monetary supply
Inflationary gap
Credibility of monetary policy
The principle of efficiency
Monetarism
32. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Structural policy
Excess Supply
Unemployment insurance
Fisher effect
33. The total planned spending on final goods and services.
Aggregation
Automatic stabilizers
Businesses
Planned aggregate expenditure (PAE)
34. The level of output where output equals planned aggregate expenditure
Short run equilibrium output
Free market
decreases increases
Quantity equation
35. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
Economic efficiency
The quality adjustment bias
Trough
NRU
36. That efficiency leads to economic prosperity for all.
Boom
Complement
Mixed market
The principle of efficiency
37. 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
Income
Real GDP
Tangible Assets
Potential output
38. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made
Real employment
Sunk cost
Complement
Capitalism
39. When inflation suddenly deviates from its normal course.
Lorenz curve
Inflation shock
The real GDP per person
Keynesian economic theory
40. Caused by changes in the overall economy.
Substitution bias
Free market
Cyclical unemployment
Macroeconomics
41. The time between the need for a macroeconomic policy and its implementation
Disinflation
Inside lag
Supply-side policy
Pay
42. The percentage of working-age people within the labor force
Laffer curve
Participation rate
The rate of inflation
Law of Demand
43. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.
Mixed market
Inflationary gap
Aggregate supply
Aggregate demand
44. 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.
The Wealth Effect
Equilibrium price
Contractionary policies
Law of Supply
45. Most free-market banking systems are based on __________ reserves.
Seller's surplus
Intermediate goods
Fractional
Hyperinflation
46. Used to demonstrate shifts in income distribution among a population over time.
Keynesian economic theory
Lorenz curve
Nominal GDP
Boom
47. A quantity that is measured in real terms - the actual quantity of a good or service
Relative price
Anchored inflation expectations
Real quantity
Sunk cost
48. Legal entity that has received a charter from a state or federal government.
Nominal GDP
Laffer curve
Corporation
Stabilization policies
49. A measure of overall price levels at a specific point in the price index.
Gross National Product (GNP)
Asset
Hyperinflation
Price level
50. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Outside lag
Consumption function
Mixed market
Indexing