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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. When the rate of inflation is extremely high.






2. A law stating that as a person consumes additional units of a good - eventually the utility gained from each additional unit of the good decreases.






3. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.






4. The time period between a policy's implementation and its desired effects on an economy.






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






6. Business entity which legally has no separate existence from its owner.






7. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available






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






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






10. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .






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






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






13. Goods not counted in the nation's GDP.






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






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






16. The beginning of a recession






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






18. The speed that money changes hands in order to buy and sell final goods and services.






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






20. Most free-market banking systems are based on __________ reserves.






21. 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.






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






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






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






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






26. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.






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






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






29. The difference between the price received by the seller and the seller's reservation price

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30. The level of output where output equals planned aggregate expenditure






31. 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






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






33. 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.






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






35. 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.






36. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.






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






38. The real cost of changing a listed price.






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






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






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






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






43. The labor sector highlights the rate of ____ .






44. Money multiplied by velocity equals nominal GDP.






45. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.






46. The adding up of individual economic variables to obtain a large - general picture of the economy.






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






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






49. The lowest point of the recession






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