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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. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.






2. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.






3. The total planned spending on final goods and services.






4. 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.






5. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).






6. The part of economics study that looks at the operation of a nation's economy as a whole






7. A GDP decline that lasts two-quarters (six months). A period of slow economic growth






8. When an economic unit makes more than it spends






9. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.






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






11. Most free-market banking systems are based on __________ reserves.






12. Used to demonstrate shifts in income distribution among a population over time.






13. When the people believe that the nation's central bank will keep inflation rates low.






14. The movement of workers between jobs - companies - and industries






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






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






17. The rate of price increase on all things except food and energy






18. 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






19. Describes how the economy directly effects the actions policymakers take.






20. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation






21. The amount of workers that are willing to work for a real wage.






22. Money multiplied by velocity equals nominal GDP.






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






24. The rise in taxes that occurs when before-tax income increases by one dollar






25. A Scottish man (1723-1790) who is known as the father of modern economics.






26. The percentage of working-age people within the labor force






27. When people's expectations of future inflation do not change even though inflation rates change.






28. Organizations that act as moderators between employers and employees






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






30. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.






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






32. The adding up of individual economic variables to obtain a large - general picture of the economy.






33. The increase in total benefit that comes from producing one additional unit.






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






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






36. Goods like food and clothing that have a short lifespan.






37. A result of there only being one buyer of a resource input - good - or service.






38. 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.






39. The continuing increase in the average level of prices of goods and services over time.






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






41. 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.






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






43. The speed that money changes hands in order to buy and sell final goods and services.






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






45. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.






46. The output per employed worker






47. Real Estate - Equipment - and Cash (physical assets)






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






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






50. An increase in this would cause an increase in the aggregate supply