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Test your basic knowledge |
CLEP Macroeconomics - 3
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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
Inflation shock
Supply-side policy
Lorenz curve
Sole proprietorship
2. The price of a good or service in relation to the price of other goods and services.
Hyperinflation
Consumption
Capitalism
Relative price
3. Natural Rate of Unemployment - a rate that will always exist
Traditional economic system
NRU
Recession
Rationing
4. The basic assumption of this model is that in the short run - firms meet demand at present price.
Substitution effect
Real employment
Keynesian model
Recession
5. The level of output where output equals planned aggregate expenditure
NRU
Asset
Inside lag
Short run equilibrium output
6. Government policies intended to increase spending and output.
Supply-side policy
Disinflation
Monopsony
Expansionary policies
7. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Labor productivity
decreases increases
Indexing
Deflation
8. Total supply of goods and services in an economy
Quantity equation
Aggregate demand
Aggregate supply
Consumer Nondurables
9. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).
Traditional economic system
Consumption
Phillips curve
Velocity
10. The part of economics study that looks at the operation of a nation's economy as a whole
Macroeconomics
Structural unemployment
Law of Supply
Aggregate supply
11. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Real quantity
Capital income
Adam Smith
Invisible hand
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.
Traditional economic system
Aggregation
Worker mobility
Aggregate supply shock
13. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Excess Supply
Recession
Inflation inertia
Labor productivity
14. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Velocity
Disinflation
Business cycle
Core rate of inflation
15. A macroeconomic policy that directly affects the structure and various institutions of an economy
Nominal GDP
Structural unemployment
Structural policy
Excess Supply
16. The time between the need for a macroeconomic policy and its implementation
Deflation
Inside lag
Expansionary policies
Labor productivity
17. Concerned with analyzing whether or not a policy should be used.
Four sectors of the economy
The real GDP per person
The rate of inflation
Normative analysis
18. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Structural unemployment
Labor productivity
Monetarism
Standard of living
19. The relationship between disposable income and spending on consumable goods and services
Consumption function
Unemployment insurance
Aggregate supply shock
Partnership
20. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Buyer's surplus
Stabilization policies
Rationing
Marginal cost
21. The total value of goods and services produced in a country valued at current prices.
Nominal GDP
Exchange
Boom
Contractionary policies
22. Represents the governmental tax rate that will best maximize tax revenues.
Okun's Law
Indexing
Laffer curve
Consumption function
23. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.
Macroeconomics
Consumption
Keynesian model
Intangible Assets
24. When people's expectations of future inflation do not change even though inflation rates change.
Anchored inflation expectations
Mixed market
Keynesian economic theory
Normative analysis
25. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Inflation shock
The rate of inflation
Okun's Law
Indexing
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
Credibility of monetary policy
Substitution bias
Fisher effect
Real employment
27. When prices fall consistently over time - leading to negative inflation.
Deflation
Structural unemployment
Gross National Product (GNP)
Adam Smith
28. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Aggregation
Menu cost
Businesses
The real GDP per person
29. The speed that money changes hands in order to buy and sell final goods and services.
Fisher effect
Velocity
Congressional budget office
Capital goods
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.
Economic efficiency
Excess Supply
Seller's reservation price
The real GDP per person
31. The labor sector highlights the rate of ____ .
Price level
Asset
Pay
Rationing
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).
Worker mobility
Real employment
Frictional unemployment
Liquidity
33. The slow change in inflation from year to year in industrialized nations
Frictional unemployment
Excess Supply
Liquidity
Inflation inertia
34. The goods and services sector focuses largely on the level of ______ .
Equilibrium price
Marginal tax rate
Income
Real quantity
35. A quantity that is measured in real terms - the actual quantity of a good or service
Lorenz curve
Exchange
The rate of inflation
Real quantity
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
Participation rate
NRU
Unemployment insurance
Business cycle
38. The portion of planned aggregate expenditure that is not based on output
Autonomous Expenditure
AD curve intersects the SAS curve
Capital income
Fisher effect
39. The adding up of individual economic variables to obtain a large - general picture of the economy.
Aggregation
Inflation inertia
Income
The Wealth Effect
40. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
AD curve intersects the SAS curve
Frictional unemployment
Sole proprietorship
Congressional budget office
41. That efficiency leads to economic prosperity for all.
AD curve intersects the SAS curve
Credibility of monetary policy
The principle of efficiency
Market equilibrium
42. Government policies aimed at stabilizing the economy by eliminating output gaps
Aggregate Supply
Congressional budget office
Four sectors of the economy
Stabilization policies
43. The ease with which an asset can be converted to currency.
Business cycle
Liquidity
Market equilibrium
Labor supply
44. Unicorporated entity that has shared ownership.
Aggregate demand
Seller's reservation price
Labor supply
Partnership
45. When both producers and consumers are satisfied with their quantities at market price.
Market equilibrium
Worker mobility
Labor supply
Labor productivity
46. The rise in taxes that occurs when before-tax income increases by one dollar
Marginal tax rate
Gross National Product (GNP)
Saving
Structural policy
47. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Labor supply
Labor unions
Fisher effect
Corporation
48. An increase in spending due to a perceived increase in wealth.
The Wealth Effect
The principle of efficiency
The rate of inflation
Law of Supply
49. The time period between a policy's implementation and its desired effects on an economy.
Corporation
The Wealth Effect
Price level
Outside lag
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.
Contractionary policies
Recession
Substitution effect
Fractional