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Test your basic knowledge |
CLEP Macroeconomics - 3
Start Test
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 quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Aggregate Supply
Income
Socially optimal quantity
Aggregate supply
2. Caused by changes in the overall economy.
Traditional economic system
Cyclical unemployment
Hyperinflation
Stabilization policies
3. The time between the need for a macroeconomic policy and its implementation
Corporation
Adam Smith
Inside lag
The Wealth Effect
4. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
The principle of efficiency
Free market
The quality adjustment bias
Intermediate goods
5. Government policies intended to increase spending and output.
Expansionary policies
Economic efficiency
Intangible Assets
Seller's surplus
6. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Consumer Nondurables
Output gap
Four sectors of the economy
Lorenz curve
7. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
AD curve intersects the SAS curve
Relative price
Aggregation
The quality adjustment bias
8. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Deflation
Capital income
Law of Demand
Free market
9. A measure of overall price levels at a specific point in the price index.
Equilibrium price
Liquidity
Price level
Indexing
10. An increase in spending due to a perceived increase in wealth.
The Wealth Effect
Saving
Inflationary gap
Interest
11. The speed that money changes hands in order to buy and sell final goods and services.
Excess Supply
Phillips curve
Velocity
The quality adjustment bias
12. The output per employed worker
Capital goods
The real GDP per person
Labor productivity
Seller's reservation price
13. The amount of workers that are willing to work for a real wage.
Complement
Gross National Product (GNP)
Labor supply
Free market
14. The ease with which an asset can be converted to currency.
Law of Diminishing Marginal Utility
Gross Domestic Product (GDP)
AD curve intersects the SAS curve
Liquidity
15. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Aggregation
Business cycle
Excess Supply
Capitalism
16. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Structural unemployment
Short run equilibrium output
Planned aggregate expenditure (PAE)
Complement
17. A record of economic increases and decreases over time.
Gross National Product (GNP)
The real GDP per person
Substitution effect
Business cycle
18. The portion of planned aggregate expenditure that is not based on output
Capital goods
Autonomous Expenditure
Free market
Buyer's surplus
19. The beginning of a recession
Businesses
Gross National Product (GNP)
Peak
Liquidity
20. The labor sector highlights the rate of ____ .
Structural policy
Pay
Potential output
Exchange
21. A policy that affects potential output
Stabilization policies
Corporation
Supply-side policy
Intangible Assets
22. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Businesses
Velocity
Consumption
Autonomous Expenditure
23. The goods and services sector focuses largely on the level of ______ .
Traditional economic system
Cyclical unemployment
Law of Diminishing Marginal Utility
Income
24. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Short run equilibrium output
Rationing
Cyclical unemployment
Marginal tax rate
25. Concerned with analyzing whether or not a policy should be used.
Sole proprietorship
Worker mobility
Normative analysis
Inflation
26. The monetary sector focuses on the ________ rate.
Equilibrium price
Deflation
Interest
Disinflation
27. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Menu cost
AD curve intersects the SAS curve
Expansionary policies
Indexing
28. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Disinflation
Invisible hand
Quantity equation
Inflation inertia
29. 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.
Market equilibrium
Inflation shock
Real employment
Contractionary policies
30. Describes how the economy directly effects the actions policymakers take.
Policy reaction function
Law of Diminishing Marginal Utility
Average tax rate
Rationing
31. When people's expectations of future inflation do not change even though inflation rates change.
Anchored inflation expectations
Equilibrium price
Market equilibrium
Velocity
32. 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.
Law of Demand
Sunk cost
Standard of living
Income
33. Goods like food and clothing that have a short lifespan.
Seller's surplus
Relative price
Law of Demand
Consumer Nondurables
34. The time period between a policy's implementation and its desired effects on an economy.
Outside lag
Complement
Unemployment insurance
Capital goods
35. 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.
Income
Standard of living
Planned aggregate expenditure (PAE)
Command economic system
36. The government office that is responsible for projecting federal surpluses and deficits
Congressional budget office
Okun's Law
Reservation price
Buyer's surplus
37. Goods that are used in the production of final goods.
Intangible Assets
Buyer's surplus
Intermediate goods
Businesses
38. The adding up of individual economic variables to obtain a large - general picture of the economy.
Lorenz curve
Labor productivity
Relative price
Aggregation
39. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Labor supply
Fisher effect
The quality adjustment bias
Saving
40. The maximum amount that an economy can output over a period of time
Capital goods
Supply-side policy
Potential output
Lorenz curve
41. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Deflation
Income
Standard of living
Gross National Product (GNP)
42. 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
Average tax rate
Seller's surplus
Real GDP
Saving
43. The increase in total cost that comes from producing one additional unit of a specific good or service.
Substitution bias
Adam Smith
Aggregate supply shock
Marginal cost
44. Total supply of goods and services in an economy
Aggregate supply
Normative analysis
Substitution bias
Peak
45. The degree to which people have access to goods and services that make their lives better.
Frictional unemployment
Tangible Assets
Standard of living
Quantity equation
46. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).
LRAS
Phillips curve
Marginal benefit
Marginal cost
47. Government policies aimed at stabilizing the economy by eliminating output gaps
Consumption
Planned aggregate expenditure (PAE)
Indexing
Stabilization policies
48. 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
Intermediate goods
Frictional unemployment
Substitution bias
Capitalism
49. Maximum price that a customer is willing to pay for a good
Total surplus
Capitalism
Peak
Reservation price
50. The real cost of changing a listed price.
Anchored inflation expectations
Menu cost
Real quantity
Expansionary policies