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CLEP Macroeconomics - 3

Subjects : clep, economics
  • Answer 50 questions in 15 minutes.
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  • Match each statement with the correct term.
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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 annual percentage rate of change in price level reflected by price indexes

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

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

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

5. 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.

6. The monetary sector focuses on the ________ rate.

7. When both producers and consumers are satisfied with their quantities at market price.

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

9. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.

10. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally

11. 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.

12. A flaw in the CPI that exaggerates real increases in the cost of living by failing to take into account customers ability to choose equally desirable goods or services when the price of their preferred good or service increases

13. A policy that affects potential output

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

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

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

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

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

19. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.

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

21. 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.

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

23. Payments that the government makes to unemployed workers.

24. The government office that is responsible for projecting federal surpluses and deficits

25. Represents the governmental tax rate that will best maximize tax revenues.

26. The difference between a buyer's reservation price (the price they want to pay) and the actual price paid for a good or service

27. 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.

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

29. 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.

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

31. 1 percent more unemployment results in 2 percent less output.

32. Organizations that act as moderators between employers and employees

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

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

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

36. A quantity that is measured in real terms - the actual quantity of a good or service

37. When an economic unit makes more than it spends

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

39. When inflation suddenly deviates from its normal course.

40. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.

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

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

43. Short-run macroeconomic equilibrium occurs at the level of GDP where the:

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

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

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

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

48. The degree to which people have access to goods and services that make their lives better.

49. The real cost of changing a listed price.

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