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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 basic assumption of this model is that in the short run - firms meet demand at present price.
Menu cost
The quality adjustment bias
Keynesian model
Seller's surplus
2. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Real employment
Indexing
Inflation shock
Aggregate demand
3. The increase in total benefit that comes from producing one additional unit.
Expansionary policies
Normative analysis
Marginal benefit
Free market
4. Goods that are used in the production of final goods.
Intermediate goods
Participation rate
Structural policy
Quantity equation
5. The continuing increase in the average level of prices of goods and services over time.
Average tax rate
Inflation
Complement
Deflation
6. The total planned spending on final goods and services.
Market equilibrium
Planned aggregate expenditure (PAE)
Inside lag
Law of Demand
7. When the people believe that the nation's central bank will keep inflation rates low.
Outside lag
Recession
Credibility of monetary policy
Labor productivity
8. The monetary sector focuses on the ________ rate.
Seller's reservation price
Mixed market
LRAS
Interest
9. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).
Capital goods
Total surplus
Phillips curve
Fractional
10. The adding up of individual economic variables to obtain a large - general picture of the economy.
Aggregate supply shock
Aggregate demand
Aggregation
Cyclical unemployment
11. The maximum amount that an economy can output over a period of time
Potential output
Price
Complement
Menu cost
12. There is an ___________ ___ when aggregate output is above potential output
Lorenz curve
Keynesian model
Inflationary gap
Phillips curve
13. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Velocity
Average tax rate
Substitution effect
Invisible hand
14. A measure of overall price levels at a specific point in the price index.
Law of Diminishing Marginal Utility
Price level
Business cycle
Sunk cost
15. 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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16. The degree to which people have access to goods and services that make their lives better.
Standard of living
Outside lag
Frictional unemployment
Gross Domestic Product (GDP)
17. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Aggregate supply
Policy reaction function
Structural unemployment
Income
18. A policy that affects potential output
Substitution bias
Supply-side policy
Capital income
The quality adjustment bias
19. The price of a good or service in relation to the price of other goods and services.
Relative price
Core rate of inflation
Seller's surplus
Sole proprietorship
20. 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.
Indexing
Corporation
Law of Demand
Autonomous Expenditure
21. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Inflation shock
Law of Diminishing Marginal Utility
Hyperinflation
Invisible hand
22. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Price
Menu cost
Capital goods
Intermediate goods
23. The relationship between disposable income and spending on consumable goods and services
Labor productivity
Fractional
LRAS
Consumption function
24. The rate of price increase on all things except food and energy
Disinflation
Intermediate Goods
Capital goods
Core rate of inflation
25. 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
Rationing
Macroeconomics
Autonomous Expenditure
Monetarism
26. The beginning of a recession
Labor productivity
Peak
Pay
Keynesian model
27. The amount of workers that are willing to work for a real wage.
Tangible Assets
Liquidity
Supply-side policy
Labor supply
28. Concerned with analyzing whether or not a policy should be used.
Outside lag
Nominal GDP
Normative analysis
Boom
29. The percentage of working-age people within the labor force
Congressional budget office
Socially optimal quantity
Businesses
Participation rate
30. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Aggregate supply
Substitution effect
Capital income
Labor productivity
31. The annual percentage rate of change in price level reflected by price indexes
Phillips curve
The rate of inflation
Excess Supply
Fisher effect
32. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made
Unemployment insurance
Substitution bias
Asset
Sunk cost
33. The ease with which an asset can be converted to currency.
Okun's Law
Tangible Assets
Economic efficiency
Liquidity
34. 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.
NRU
Automatic stabilizers
Capital income
Businesses
35. A macroeconomic policy that directly affects the structure and various institutions of an economy
Structural unemployment
Invisible hand
Lorenz curve
Structural policy
36. (n) something of value; a resource; an advantage
NRU
Congressional budget office
Nominal GDP
Asset
37. When inflation suddenly deviates from its normal course.
Keynesian model
Inflation shock
Gross Domestic Product (GDP)
Businesses
38. An increase in this would cause an increase in the aggregate supply
Labor productivity
Intermediate goods
Sole proprietorship
Command economic system
39. Real Estate - Equipment - and Cash (physical assets)
Tangible Assets
Asset
Average tax rate
Partnership
40. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
Automatic stabilizers
Real employment
Indexing
LRAS
41. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Velocity
Total surplus
Inside lag
Nominal GDP
42. When people's expectations of future inflation do not change even though inflation rates change.
Law of Supply
Labor unions
Command economic system
Anchored inflation expectations
43. Maximum price that a customer is willing to pay for a good
Capital income
Reservation price
Inflation
decreases increases
44. Government policies aimed at stabilizing the economy by eliminating output gaps
Participation rate
Keynesian economic theory
Stabilization policies
Menu cost
45. The real cost of changing a listed price.
Aggregate supply shock
Menu cost
Price
Traditional economic system
46. Total supply of goods and services in an economy
Labor supply
Normative analysis
Keynesian economic theory
Aggregate supply
47. The lowest point of the recession
Relative price
Marginal benefit
Trough
Law of Diminishing Marginal Utility
48. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Reservation price
Consumer Nondurables
decreases increases
Inflation inertia
49. The part of economics study that looks at the operation of a nation's economy as a whole
Labor supply
Policy reaction function
Macroeconomics
Disinflation
50. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Rationing
Invisible hand
Anchored inflation expectations
Hyperinflation