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Test your basic knowledge |
CLEP Macroeconomics - 3
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Subjects
:
clep
,
economics
Instructions:
Answer 50 questions in 15 minutes.
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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 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
Monetarism
The real GDP per person
Law of Demand
Corporation
2. The rise in taxes that occurs when before-tax income increases by one dollar
Interest
Law of Diminishing Marginal Utility
Marginal tax rate
Hyperinflation
3. 1 percent more unemployment results in 2 percent less output.
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4. The percentage of working-age people within the labor force
Participation rate
Laffer curve
Aggregate supply
Credibility of monetary policy
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.
Economic efficiency
Gross Domestic Product (GDP)
Supply-side policy
Nominal GDP
6. Concerned with analyzing whether or not a policy should be used.
Deflation
Marginal cost
Business cycle
Normative analysis
7. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Keynesian economic theory
Gross Domestic Product (GDP)
Capitalism
Standard of living
8. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Recession
decreases increases
Keynesian model
Excess Supply
9. Used to demonstrate shifts in income distribution among a population over time.
Lorenz curve
decreases increases
Relative price
AD curve intersects the SAS curve
10. When an economic unit makes more than it spends
Expansionary policies
Rationing
Saving
Menu cost
11. 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.
Boom
Structural unemployment
Law of Diminishing Marginal Utility
Congressional budget office
12. The degree to which people have access to goods and services that make their lives better.
Standard of living
Traditional economic system
LRAS
Output gap
13. The beginning of a recession
Total surplus
Menu cost
Marginal cost
Peak
14. Government policies intended to increase spending and output.
Expansionary policies
Monetarism
decreases increases
Labor productivity
15. Patents - Goodwill - and Trademarks (lack physical substance)
Intangible Assets
Inside lag
Labor supply
Aggregate Supply
16. The movement of workers between jobs - companies - and industries
Worker mobility
NRU
Policy reaction function
Liquidity
17. A measure of overall price levels at a specific point in the price index.
Potential output
Price level
The quality adjustment bias
Buyer's surplus
18. The output per employed worker
Labor productivity
Autonomous Expenditure
Equilibrium price
Lorenz curve
19. The increase in total cost that comes from producing one additional unit of a specific good or service.
Planned aggregate expenditure (PAE)
Pay
Marginal cost
The quality adjustment bias
20. 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.
Law of Supply
Anchored inflation expectations
Labor productivity
Saving
21. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Businesses
Adam Smith
Fisher effect
Normative analysis
22. That efficiency leads to economic prosperity for all.
Business cycle
Buyer's surplus
Potential output
The principle of efficiency
23. An economic system in which all factors of production are owned and controlled by the government. Often referred to as a centrally planned economic system. Example: Former Soviet Union.
Disinflation
Command economic system
Businesses
Velocity
24. A free market system that relies on private property ownership and supply and demand
Expansionary policies
Free market
Gross National Product (GNP)
Capitalism
25. Represents the governmental tax rate that will best maximize tax revenues.
Total surplus
Lorenz curve
Laffer curve
Labor productivity
26. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
LRAS
Inflationary gap
The rate of inflation
Recession
27. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Consumption function
Capital income
Partnership
Total surplus
28. The adding up of individual economic variables to obtain a large - general picture of the economy.
Law of Supply
Labor unions
Aggregation
Marginal benefit
29. Maximum price that a customer is willing to pay for a good
Velocity
Reservation price
Potential output
The Wealth Effect
30. The slow change in inflation from year to year in industrialized nations
Inflation inertia
Frictional unemployment
The rate of inflation
Excess Supply
31. 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.
AD curve intersects the SAS curve
Equilibrium price
Fisher effect
Capital goods
32. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Capitalism
Law of Diminishing Marginal Utility
Command economic system
Gross National Product (GNP)
33. The total value of goods and services produced in a country valued at current prices.
Economic efficiency
Consumption function
Trough
Nominal GDP
34. Goods not counted in the nation's GDP.
Macroeconomics
Aggregate demand
Intermediate Goods
Mixed market
35. The international sector emphasizes the ________ rate.
Exchange
Output gap
Intermediate goods
Laffer curve
36. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Gross Domestic Product (GDP)
Outside lag
Aggregate supply shock
Invisible hand
37. A quantity that is measured in real terms - the actual quantity of a good or service
Indexing
Real quantity
Four sectors of the economy
Lorenz curve
38. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
Sole proprietorship
Aggregation
Free market
NRU
39. The basic assumption of this model is that in the short run - firms meet demand at present price.
Keynesian model
Supply-side policy
Labor unions
Frictional unemployment
40. 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.
The real GDP per person
Automatic stabilizers
Sunk cost
Recession
41. Goods that are used in the production of final goods.
Substitution bias
Intermediate goods
Aggregate Supply
Real GDP
42. When inflation suddenly deviates from its normal course.
Consumption
Inflation shock
Business cycle
Potential output
43. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Output gap
Inflation
Structural unemployment
Inside lag
44. A result of there only being one buyer of a resource input - good - or service.
Policy reaction function
Core rate of inflation
Monopsony
Gross National Product (GNP)
45. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Price
Marginal tax rate
Complement
Capitalism
46. The increase in total benefit that comes from producing one additional unit.
Aggregate demand
Deflation
Monopsony
Marginal benefit
47. The speed that money changes hands in order to buy and sell final goods and services.
Law of Diminishing Marginal Utility
Sunk cost
Structural unemployment
Velocity
48. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Asset
Autonomous Expenditure
decreases increases
Price
49. Money multiplied by velocity equals nominal GDP.
Short run equilibrium output
Labor productivity
Aggregation
Quantity equation
50. When both producers and consumers are satisfied with their quantities at market price.
Autonomous Expenditure
Corporation
Mixed market
Market equilibrium
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