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CLEP Macroeconomics - 3
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Subjects
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clep
,
economics
Instructions:
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 total planned spending on final goods and services.
Substitution effect
Planned aggregate expenditure (PAE)
Structural unemployment
Price level
2. The output per employed worker
Substitution effect
Businesses
Asset
Labor productivity
3. 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.
The rate of inflation
Contractionary policies
Interest
Automatic stabilizers
4. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).
Saving
Policy reaction function
NRU
Phillips curve
5. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Relative price
Free market
Complement
Labor supply
6. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Monetarism
Structural unemployment
Expansionary policies
The principle of efficiency
7. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Structural unemployment
Capital goods
Supply-side policy
Keynesian economic theory
8. Caused by changes in the overall economy.
The quality adjustment bias
Outside lag
decreases increases
Cyclical unemployment
9. Unicorporated entity that has shared ownership.
Consumption function
Partnership
Capital goods
Monopsony
10. 1 percent more unemployment results in 2 percent less output.
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11. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Mixed market
Fisher effect
Corporation
Intermediate goods
12. 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.
Quantity equation
Capital goods
Law of Demand
Contractionary policies
13. Organizations that act as moderators between employers and employees
Labor unions
Mixed market
Recession
Saving
14. Refers to individuals between jobs seeking new employment - people re-entering the workforce (ie mom whose kids are grown) - and new entrants (ie college graduates).
AD curve intersects the SAS curve
Interest
Frictional unemployment
Pay
15. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Intermediate goods
Interest
Price
Anchored inflation expectations
16. When prices fall consistently over time - leading to negative inflation.
Consumer Nondurables
Menu cost
Deflation
The quality adjustment bias
17. A Scottish man (1723-1790) who is known as the father of modern economics.
Economic efficiency
Adam Smith
Policy reaction function
LRAS
18. A record of economic increases and decreases over time.
Supply-side policy
Traditional economic system
Normative analysis
Business cycle
19. The relationship between disposable income and spending on consumable goods and services
Tangible Assets
Congressional budget office
Autonomous Expenditure
Consumption function
20. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Indexing
Price level
The real GDP per person
Labor productivity
21. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Planned aggregate expenditure (PAE)
Socially optimal quantity
Labor productivity
Disinflation
22. A measure of overall price levels at a specific point in the price index.
Market equilibrium
Price level
Pay
Economic efficiency
23. The goods and services sector focuses largely on the level of ______ .
Law of Diminishing Marginal Utility
Boom
Income
Macroeconomics
24. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
Complement
LRAS
Output gap
Businesses
25. The price of a good or service in relation to the price of other goods and services.
Invisible hand
Marginal benefit
Relative price
Intangible Assets
26. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.
The real GDP per person
Labor supply
Mixed market
LRAS
27. Concerned with analyzing whether or not a policy should be used.
Exchange
Market equilibrium
Normative analysis
Keynesian economic theory
28. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Indexing
Inflation shock
Output gap
Seller's reservation price
29. The slow change in inflation from year to year in industrialized nations
Inflationary gap
Inflation inertia
Structural unemployment
Law of Demand
30. The time period between a policy's implementation and its desired effects on an economy.
Seller's reservation price
Outside lag
Aggregate supply
Marginal cost
31. The continuing increase in the average level of prices of goods and services over time.
Reservation price
Keynesian model
Autonomous Expenditure
Inflation
32. The total value of goods and services produced in a country valued at current prices.
AD curve intersects the SAS curve
Nominal GDP
Traditional economic system
decreases increases
33. The beginning of a recession
Invisible hand
Excess Supply
Peak
Indexing
34. The adding up of individual economic variables to obtain a large - general picture of the economy.
Aggregation
Real employment
Price level
Traditional economic system
35. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Fisher effect
Automatic stabilizers
Seller's surplus
decreases increases
36. The labor sector highlights the rate of ____ .
Rationing
Gross Domestic Product (GDP)
Pay
Output gap
37. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
Four sectors of the economy
Fractional
The quality adjustment bias
Sunk cost
38. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
The real GDP per person
Consumption
Total surplus
Expansionary policies
39. Business entity which legally has no separate existence from its owner.
Inflation
Adam Smith
Sole proprietorship
Tangible Assets
40. Government policies aimed at stabilizing the economy by eliminating output gaps
Stabilization policies
Indexing
Phillips curve
decreases increases
41. The government office that is responsible for projecting federal surpluses and deficits
Congressional budget office
Aggregate supply
Free market
Asset
42. The ease with which an asset can be converted to currency.
Normative analysis
Expansionary policies
Standard of living
Liquidity
43. The amount of workers that are willing to work for a real wage.
Expansionary policies
Labor supply
Congressional budget office
Labor productivity
44. Real Estate - Equipment - and Cash (physical assets)
Consumer Nondurables
Tangible Assets
Law of Supply
Nominal GDP
45. Goods like food and clothing that have a short lifespan.
Deflation
Cyclical unemployment
Income
Consumer Nondurables
46. 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.
Economic efficiency
Command economic system
Labor unions
Hyperinflation
47. 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.
Potential output
The quality adjustment bias
Income
Law of Supply
48. (n) something of value; a resource; an advantage
Boom
Asset
LRAS
AD curve intersects the SAS curve
49. The increase in total cost that comes from producing one additional unit of a specific good or service.
Marginal cost
Trough
Inflation inertia
Free market
50. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
The Wealth Effect
Disinflation
Real GDP
Keynesian model
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