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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. A measure of overall price levels at a specific point in the price index.
Price level
Labor supply
Intangible Assets
Average tax rate
2. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Law of Diminishing Marginal Utility
Complement
Seller's surplus
Core rate of inflation
3. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Excess Supply
Inside lag
AD curve intersects the SAS curve
Aggregate supply shock
4. Maximum price that a customer is willing to pay for a good
Partnership
LRAS
Stabilization policies
Reservation price
5. When an economic unit makes more than it spends
Capitalism
Inflation
Saving
Core rate of inflation
6. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Structural unemployment
Marginal benefit
Gross Domestic Product (GDP)
Businesses
7. The level of output where output equals planned aggregate expenditure
Intangible Assets
Buyer's surplus
Short run equilibrium output
Command economic system
8. The adding up of individual economic variables to obtain a large - general picture of the economy.
Aggregation
Equilibrium price
LRAS
Command economic system
9. The monetary sector focuses on the ________ rate.
Interest
Aggregate demand
Corporation
Boom
10. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
The quality adjustment bias
Marginal cost
LRAS
Marginal benefit
11. The price of a good or service in relation to the price of other goods and services.
Recession
Relative price
Seller's surplus
Fisher effect
12. The basic assumption of this model is that in the short run - firms meet demand at present price.
Keynesian model
Planned aggregate expenditure (PAE)
Saving
Supply-side policy
13. Used to demonstrate shifts in income distribution among a population over time.
Laffer curve
Lorenz curve
Gross Domestic Product (GDP)
Output gap
14. The difference between a buyer's reservation price (the price they want to pay) and the actual price paid for a good or service
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15. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Aggregate supply
Reservation price
Labor supply
Socially optimal quantity
16. (n) something of value; a resource; an advantage
Complement
Real employment
Asset
The Wealth Effect
17. The maximum amount that an economy can output over a period of time
Phillips curve
Total surplus
Exchange
Potential output
18. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Stabilization policies
Sole proprietorship
Capital income
Gross National Product (GNP)
19. An increase in spending due to a perceived increase in wealth.
Policy reaction function
Buyer's surplus
Corporation
The Wealth Effect
20. Combines pure market and command. Example: Japan
Menu cost
Indexing
Aggregate supply shock
Mixed market
21. Government policies aimed at stabilizing the economy by eliminating output gaps
Credibility of monetary policy
Adam Smith
Stabilization policies
Inside lag
22. A large - unexpected change in the cost of resources.
Aggregate supply shock
Business cycle
Credibility of monetary policy
Liquidity
23. When prices fall consistently over time - leading to negative inflation.
Aggregate supply
Deflation
Complement
Output gap
24. The slow change in inflation from year to year in industrialized nations
Macroeconomics
Phillips curve
Keynesian economic theory
Inflation inertia
25. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Contractionary policies
Keynesian model
Worker mobility
Economic efficiency
26. When both producers and consumers are satisfied with their quantities at market price.
Hyperinflation
Capital goods
Potential output
Market equilibrium
27. A Scottish man (1723-1790) who is known as the father of modern economics.
Sole proprietorship
Inflation inertia
Adam Smith
Outside lag
28. The total planned spending on final goods and services.
Labor unions
Standard of living
Labor supply
Planned aggregate expenditure (PAE)
29. Money multiplied by velocity equals nominal GDP.
Short run equilibrium output
Deflation
Quantity equation
The real GDP per person
30. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).
Relative price
Labor unions
Consumption
Phillips curve
31. The beginning of a recession
Anchored inflation expectations
Average tax rate
Peak
Saving
32. Government policies intended to increase spending and output.
The quality adjustment bias
Expansionary policies
Peak
Aggregate demand
33. 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
Real GDP
Interest
Reservation price
Hyperinflation
34. When the rate of inflation is extremely high.
Hyperinflation
Adam Smith
Capitalism
Law of Supply
35. The time period between a policy's implementation and its desired effects on an economy.
Intermediate goods
Outside lag
Marginal benefit
Labor productivity
36. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Structural policy
NRU
decreases increases
Consumption function
37. 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.
Interest
Monetarism
Gross Domestic Product (GDP)
Inflation inertia
38. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Automatic stabilizers
Businesses
Marginal cost
Rationing
39. The annual percentage rate of change in price level reflected by price indexes
Corporation
The rate of inflation
Trough
Indexing
40. In a traditional economic system - the availability of resources is based on inheritance. Goods are only produced for consumption and surpluses do not occur. This type of economy is normally found in South American - Asian - and African countries.
Intangible Assets
Sunk cost
Inside lag
Traditional economic system
41. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Intermediate goods
Gross National Product (GNP)
Inflation shock
Okun's Law
42. Natural Rate of Unemployment - a rate that will always exist
NRU
Interest
Short run equilibrium output
Marginal tax rate
43. The movement of workers between jobs - companies - and industries
Worker mobility
Businesses
The principle of efficiency
Output gap
44. When people's expectations of future inflation do not change even though inflation rates change.
Expansionary policies
Anchored inflation expectations
Standard of living
Stabilization policies
45. The difference between the price received by the seller and the seller's reservation price
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46. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
The real GDP per person
Free market
Marginal benefit
Labor unions
47. 1 percent more unemployment results in 2 percent less output.
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48. 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.
Structural unemployment
Deflation
Equilibrium price
The Wealth Effect
49. The real cost of changing a listed price.
Menu cost
Law of Diminishing Marginal Utility
Substitution effect
Autonomous Expenditure
50. Goods and services sector - Labor sector - monetary sector - international sector.
Exchange
Price
Four sectors of the economy
Adam Smith