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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. Money multiplied by velocity equals nominal GDP.






2. 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.






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






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






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






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






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






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






9. A free market system that relies on private property ownership and supply and demand






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






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






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






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






14. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.






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






16. When the rate of inflation is extremely high.






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






18. The rate of price increase on all things except food and energy






19. Combines pure market and command. Example: Japan






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






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. The lowest point of the recession






23. A policy that affects potential output






24. 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.






25. 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.






26. The increase in total cost that comes from producing one additional unit of a specific good or service.






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






28. Payments that the government makes to unemployed workers.






29. Organizations that act as moderators between employers and employees






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






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






32. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus






33. A Scottish man (1723-1790) who is known as the father of modern economics.






34. 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.






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






36. The output per employed worker






37. The maximum amount that an economy can output over a period of time






38. The degree to which people have access to goods and services that make their lives better.






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






40. 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






41. The real cost of changing a listed price.






42. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.






43. Total supply of goods and services in an economy






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






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






46. A measure of overall price levels at a specific point in the price index.






47. The movement of workers between jobs - companies - and industries






48. 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).






49. Real Estate - Equipment - and Cash (physical assets)






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