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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. There is an ___________ ___ when aggregate output is above potential output






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






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






4. Goods and services sector - Labor sector - monetary sector - international sector.






5. The output per employed worker






6. The annual percentage rate of change in price level reflected by price indexes






7. When people's expectations of future inflation do not change even though inflation rates change.






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






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






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






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






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






14. The law that states that as the price of any good or service increases - the quantity of that good or service will increase and vice versa.






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






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






17. When an economic unit makes more than it spends






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






19. When prices fall consistently over time - leading to negative inflation.






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






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






22. Money multiplied by velocity equals nominal GDP.






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






24. The international sector emphasizes the ________ rate.






25. 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.






26. The price of a good or service in relation to the price of other goods and services.






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






28. An increase in this would cause an increase in the aggregate supply






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






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






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






32. Concerned with analyzing whether or not a policy should be used.






33. When the people believe that the nation's central bank will keep inflation rates low.






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






35. A free market system that relies on private property ownership and supply and demand






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






37. 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.






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






39. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.






40. A macroeconomic policy that directly affects the structure and various institutions of an economy






41. The time between the need for a macroeconomic policy and its implementation






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






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






45. Government policies intended to increase spending and output.






46. The increase in total cost that comes from producing one additional unit of a specific good or service.






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






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






49. That efficiency leads to economic prosperity for all.






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