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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. 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






2. Total supply of goods and services in an economy






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






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






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






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






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






8. The goods and services sector focuses largely on the level of ______ .






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






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






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






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






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






14. The relationship between disposable income and spending on consumable goods and services






15. The maximum amount that an economy can output over a period of time






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






17. 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.






18. Government policies intended to increase spending and output.






19. The ease with which an asset can be converted to currency.






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






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






22. Legal entity that has received a charter from a state or federal government.






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






24. 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.






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






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






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






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






29. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.






30. 1 percent more unemployment results in 2 percent less output.

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






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






33. Extreme economic growth






34. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made






35. Money multiplied by velocity equals nominal GDP.






36. 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.






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






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. Organizations that act as moderators between employers and employees






40. The total value of goods and services produced in a country valued at current prices.






41. The beginning of a recession






42. 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






43. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.






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






45. When an economic unit makes more than it spends






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






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






48. An increase in spending due to a perceived increase in wealth.






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






50. Business entity which legally has no separate existence from its owner.