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






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






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






4. Goods that are used in the production of final goods.






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






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






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






8. The monetary sector focuses on the ________ rate.






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






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






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






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






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






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






15. The difference between a buyer's reservation price (the price they want to pay) and the actual price paid for a good or service

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






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






18. A policy that affects potential output






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






20. 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.






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






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






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






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






25. 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






26. The beginning of a recession






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






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






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






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






31. The annual percentage rate of change in price level reflected by price indexes






32. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made






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






34. Programs and economic policies such as income taxes - unemployment insurance and TANF (Temporary Aid to Needy Families) that are automatically in place - help to decrease fluctuations in the GDP.






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






36. (n) something of value; a resource; an advantage






37. When inflation suddenly deviates from its normal course.






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






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






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






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






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






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






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






45. The real cost of changing a listed price.






46. Total supply of goods and services in an economy






47. The lowest point of the recession






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






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






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