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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. 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.






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






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






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






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






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






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






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






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






11. A measure of overall price levels at a specific point in the price index.






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.






13. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.






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.






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






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






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






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






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.






21. The slow change in inflation from year to year in industrialized nations






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






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.






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






25. Money multiplied by velocity equals nominal GDP.






26. Maximum price that a customer is willing to pay for a good






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






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






29. That efficiency leads to economic prosperity for all.






30. Used in the production of final goods - but instead of being consumed - are available for reuse.






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






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






33. Goods like food and clothing that have a short lifespan.






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






35. A Scottish man (1723-1790) who is known as the father of modern economics.






36. When an economic unit makes more than it spends






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






38. The amount of workers that are willing to work for a real wage.






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






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






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






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 .






43. Government policies aimed at stabilizing the economy by eliminating output gaps






44. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.






45. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)






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






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






48. Natural Rate of Unemployment - a rate that will always exist






49. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.






50. The portion of planned aggregate expenditure that is not based on output