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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. The difference between the price received by the seller and the seller's reservation price
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2. The time period between a policy's implementation and its desired effects on an economy.
Inflation
Outside lag
Output gap
Price
3. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Structural unemployment
Labor supply
Phillips curve
Real GDP
4. The increase in total benefit that comes from producing one additional unit.
Relative price
Seller's reservation price
Autonomous Expenditure
Marginal benefit
5. The maximum amount that an economy can output over a period of time
The Wealth Effect
Potential output
Marginal cost
Short run equilibrium output
6. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.
Consumption
Structural policy
Labor unions
Price
7. Describes how the economy directly effects the actions policymakers take.
Corporation
Policy reaction function
Indexing
Seller's reservation price
8. 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
Consumer Nondurables
Monetarism
Four sectors of the economy
Recession
9. 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
Potential output
Unemployment insurance
Substitution bias
Capital income
10. The rise in taxes that occurs when before-tax income increases by one dollar
Average tax rate
Real GDP
Marginal tax rate
Labor productivity
11. A measure of overall price levels at a specific point in the price index.
Standard of living
Price level
Velocity
Planned aggregate expenditure (PAE)
12. 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.
AD curve intersects the SAS curve
Corporation
Gross Domestic Product (GDP)
Deflation
13. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
Short run equilibrium output
Hyperinflation
Aggregate Supply
Monopsony
14. 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.
Frictional unemployment
Velocity
Command economic system
Rationing
15. Total tax paid divided by total (taxable) income - as a percentage.
Average tax rate
Cyclical unemployment
Aggregate supply shock
Real quantity
16. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Indexing
Unemployment insurance
Planned aggregate expenditure (PAE)
Recession
17. The part of economics study that looks at the operation of a nation's economy as a whole
Output gap
Relative price
Interest
Macroeconomics
18. The smallest dollar amount for which a seller would be willing to sell an additional unit - generally equal to marginal cost
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19. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Total surplus
Congressional budget office
Intangible Assets
Adam Smith
20. 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.
Laffer curve
Equilibrium price
Sunk cost
Real employment
21. The slow change in inflation from year to year in industrialized nations
Menu cost
Inflation inertia
Real quantity
Aggregate Supply
22. Represents the governmental tax rate that will best maximize tax revenues.
Boom
Laffer curve
Sunk cost
Gross National Product (GNP)
23. 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.
Marginal cost
Average tax rate
Contractionary policies
Gross National Product (GNP)
24. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Sole proprietorship
Phillips curve
Substitution effect
Rationing
25. Money multiplied by velocity equals nominal GDP.
Fisher effect
Price level
Quantity equation
Marginal benefit
26. Maximum price that a customer is willing to pay for a good
Reservation price
Potential output
Law of Diminishing Marginal Utility
Marginal benefit
27. Legal entity that has received a charter from a state or federal government.
Corporation
The rate of inflation
Deflation
Recession
28. The total value of goods and services produced in a country valued at current prices.
Labor productivity
Market equilibrium
Expansionary policies
Nominal GDP
29. That efficiency leads to economic prosperity for all.
Pay
Price level
The principle of efficiency
Consumer Nondurables
30. Used in the production of final goods - but instead of being consumed - are available for reuse.
Recession
Intangible Assets
Capital goods
Labor productivity
31. A quantity that is measured in real terms - the actual quantity of a good or service
Real quantity
Business cycle
decreases increases
Laffer curve
32. The ease with which an asset can be converted to currency.
Policy reaction function
Traditional economic system
Law of Demand
Liquidity
33. Goods like food and clothing that have a short lifespan.
Trough
The principle of efficiency
Automatic stabilizers
Consumer Nondurables
34. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Consumption
Output gap
Capital income
Buyer's surplus
35. A Scottish man (1723-1790) who is known as the father of modern economics.
Command economic system
Law of Demand
Seller's surplus
Adam Smith
36. When an economic unit makes more than it spends
Planned aggregate expenditure (PAE)
Saving
Exchange
Inside lag
37. The degree to which people have access to goods and services that make their lives better.
Standard of living
decreases increases
Disinflation
Adam Smith
38. The amount of workers that are willing to work for a real wage.
Hyperinflation
Gross Domestic Product (GDP)
Businesses
Labor supply
39. 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
Nominal GDP
Real GDP
Exchange
Trough
40. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Sole proprietorship
Gross National Product (GNP)
Seller's reservation price
Aggregate Supply
41. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.
Standard of living
Phillips curve
Aggregate demand
Normative analysis
42. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
Expansionary policies
LRAS
Menu cost
Cyclical unemployment
43. Government policies aimed at stabilizing the economy by eliminating output gaps
The real GDP per person
Labor supply
Relative price
Stabilization policies
44. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Disinflation
AD curve intersects the SAS curve
Traditional economic system
Consumer Nondurables
45. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Output gap
Core rate of inflation
Substitution bias
Aggregate Supply
46. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
decreases increases
Expansionary policies
Substitution bias
Adam Smith
47. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Excess Supply
Indexing
Real GDP
Business cycle
48. Natural Rate of Unemployment - a rate that will always exist
Excess Supply
Marginal cost
Liquidity
NRU
49. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Market equilibrium
Boom
Keynesian economic theory
Seller's reservation price
50. The portion of planned aggregate expenditure that is not based on output
Autonomous Expenditure
Aggregation
Businesses
Planned aggregate expenditure (PAE)