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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 relationship between disposable income and spending on consumable goods and services
The principle of efficiency
Aggregation
Consumption function
Total surplus
2. When an economic unit makes more than it spends
Gross Domestic Product (GDP)
Reservation price
Tangible Assets
Saving
3. Goods not counted in the nation's GDP.
Aggregate supply
Intermediate Goods
Businesses
Saving
4. When the rate of inflation is extremely high.
Hyperinflation
Complement
Nominal GDP
Interest
5. Is equal to Consumption + Government Expenditures + Investment + Exports - Imports The market value of all goods and services produced within a nation during a specified amount of time.
Automatic stabilizers
Velocity
Businesses
Gross Domestic Product (GDP)
6. The increase in total benefit that comes from producing one additional unit.
Marginal benefit
Aggregate Supply
Monetarism
Liquidity
7. A result of there only being one buyer of a resource input - good - or service.
Real GDP
Monopsony
Capital goods
Law of Supply
8. A Scottish man (1723-1790) who is known as the father of modern economics.
Trough
Adam Smith
Laffer curve
Peak
9. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Boom
Fisher effect
Socially optimal quantity
Keynesian economic theory
10. The adding up of individual economic variables to obtain a large - general picture of the economy.
Traditional economic system
Substitution effect
Adam Smith
Aggregation
11. The labor sector highlights the rate of ____ .
Monetarism
Complement
Asset
Pay
12. Natural Rate of Unemployment - a rate that will always exist
NRU
Traditional economic system
Partnership
Businesses
13. Government policies intended to increase spending and output.
Participation rate
Marginal tax rate
Saving
Expansionary policies
14. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
Total surplus
Contractionary policies
Sole proprietorship
AD curve intersects the SAS curve
15. Real Estate - Equipment - and Cash (physical assets)
Tangible Assets
Keynesian economic theory
Cyclical unemployment
Labor productivity
16. 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.
Consumption
Law of Demand
Contractionary policies
Command economic system
17. The amount of workers that are willing to work for a real wage.
Partnership
Labor supply
Inside lag
Marginal cost
18. The slow change in inflation from year to year in industrialized nations
Inflation inertia
Fractional
Credibility of monetary policy
Complement
19. Government policies aimed at stabilizing the economy by eliminating output gaps
Aggregate supply
Output gap
Planned aggregate expenditure (PAE)
Stabilization policies
20. Legal entity that has received a charter from a state or federal government.
Frictional unemployment
Capitalism
Corporation
Short run equilibrium output
21. The rise in taxes that occurs when before-tax income increases by one dollar
Seller's surplus
The rate of inflation
Marginal tax rate
Outside lag
22. The part of economics study that looks at the operation of a nation's economy as a whole
Labor productivity
Macroeconomics
Economic efficiency
Saving
23. The basic assumption of this model is that in the short run - firms meet demand at present price.
Macroeconomics
Indexing
Total surplus
Keynesian model
24. A quantity that is measured in real terms - the actual quantity of a good or service
Real quantity
Liquidity
Stabilization policies
Total surplus
25. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
Short run equilibrium output
Law of Demand
Aggregate Supply
Socially optimal quantity
26. Concerned with analyzing whether or not a policy should be used.
Socially optimal quantity
Real employment
Income
Normative analysis
27. A law stating that as the price of a product increases the demand of that product decreases - while if the price of a product decreases the demand for that product increases.
Unemployment insurance
Core rate of inflation
Invisible hand
Law of Demand
28. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Relative price
Complement
Okun's Law
Anchored inflation expectations
29. The goods and services sector focuses largely on the level of ______ .
Standard of living
Traditional economic system
Partnership
Income
30. Total supply of goods and services in an economy
Aggregate supply
Income
Real quantity
Marginal cost
31. That efficiency leads to economic prosperity for all.
Participation rate
Inflation shock
Fisher effect
The principle of efficiency
32. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
decreases increases
Pay
Gross Domestic Product (GDP)
Potential output
33. A macroeconomic policy that directly affects the structure and various institutions of an economy
Anchored inflation expectations
Real GDP
Intermediate goods
Structural policy
34. 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.
Labor productivity
Velocity
Automatic stabilizers
LRAS
35. A GDP decline that lasts two-quarters (six months). A period of slow economic growth
AD curve intersects the SAS curve
Equilibrium price
Recession
Command economic system
36. When the people believe that the nation's central bank will keep inflation rates low.
Rationing
Credibility of monetary policy
Hyperinflation
Macroeconomics
37. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Marginal cost
Rationing
Menu cost
Capital income
38. An increase in spending due to a perceived increase in wealth.
Policy reaction function
The Wealth Effect
Planned aggregate expenditure (PAE)
Okun's Law
39. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
decreases increases
Gross National Product (GNP)
Participation rate
Intermediate Goods
40. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Quantity equation
Fisher effect
Output gap
Rationing
41. The maximum amount that an economy can output over a period of time
Cyclical unemployment
Potential output
Aggregation
Unemployment insurance
42. The movement of workers between jobs - companies - and industries
Marginal cost
Equilibrium price
Seller's surplus
Worker mobility
43. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Corporation
Exchange
Keynesian economic theory
Fisher effect
44. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.
Labor productivity
The real GDP per person
Keynesian model
Inflation
45. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Stabilization policies
The rate of inflation
Command economic system
Substitution effect
46. There is an ___________ ___ when aggregate output is above potential output
Inflationary gap
Labor supply
Trough
Aggregation
47. The time period between a policy's implementation and its desired effects on an economy.
Law of Supply
Outside lag
Aggregate supply
Sunk cost
48. Money multiplied by velocity equals nominal GDP.
Congressional budget office
Quantity equation
Law of Diminishing Marginal Utility
AD curve intersects the SAS curve
49. The difference between the price received by the seller and the seller's reservation price
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50. The annual percentage rate of change in price level reflected by price indexes
Socially optimal quantity
The rate of inflation
Deflation
Exchange