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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. A policy that affects potential output






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






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






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






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






6. Government policies intended to increase spending and output.






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






8. Total supply of goods and services in an economy






9. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).






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






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






12. In a traditional economic system - the availability of resources is based on inheritance. Goods are only produced for consumption and surpluses do not occur. This type of economy is normally found in South American - Asian - and African countries.






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






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






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






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






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






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






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






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






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






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






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






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






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






26. 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






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






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






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






30. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.






31. The labor sector highlights the rate of ____ .






32. 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).






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






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






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






36. 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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37. The percentage of working-age people within the labor force






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






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






40. Short-run macroeconomic equilibrium occurs at the level of GDP where the:






41. That efficiency leads to economic prosperity for all.






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






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






44. Unicorporated entity that has shared ownership.






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






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






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






48. An increase in spending due to a perceived increase in wealth.






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






50. 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.