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Test your basic knowledge |
CLEP Macroeconomics - 3
Start Test
Study First
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 level of output where output equals planned aggregate expenditure
LRAS
Planned aggregate expenditure (PAE)
Short run equilibrium output
Unemployment insurance
2. The increase in total cost that comes from producing one additional unit of a specific good or service.
Adam Smith
Labor productivity
Outside lag
Marginal cost
3. The price of a good or service in relation to the price of other goods and services.
Real GDP
Relative price
Seller's surplus
Substitution bias
4. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Real quantity
Economic efficiency
Output gap
Phillips curve
5. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Gross Domestic Product (GDP)
decreases increases
Rationing
Autonomous Expenditure
6. Combines pure market and command. Example: Japan
Mixed market
Marginal benefit
Nominal GDP
Labor productivity
7. The lowest point of the recession
Consumption
Trough
Congressional budget office
Labor productivity
8. An increase in spending due to a perceived increase in wealth.
The Wealth Effect
Market equilibrium
Reservation price
Expansionary policies
9. 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.
Labor supply
Buyer's surplus
Contractionary policies
Outside lag
10. Legal entity that has received a charter from a state or federal government.
NRU
Corporation
Business cycle
Structural unemployment
11. Concerned with analyzing whether or not a policy should be used.
Monetarism
The rate of inflation
Stabilization policies
Normative analysis
12. The output per employed worker
Consumption function
Reservation price
Unemployment insurance
Labor productivity
13. Goods and services sector - Labor sector - monetary sector - international sector.
Aggregate Supply
Monopsony
Seller's reservation price
Four sectors of the economy
14. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Consumption
Substitution bias
Menu cost
Indexing
15. The international sector emphasizes the ________ rate.
Disinflation
Law of Supply
Exchange
The principle of efficiency
16. Extreme economic growth
Velocity
Substitution bias
Boom
Worker mobility
17. The movement of workers between jobs - companies - and industries
Worker mobility
Frictional unemployment
Law of Diminishing Marginal Utility
Normative analysis
18. The portion of planned aggregate expenditure that is not based on output
NRU
Normative analysis
Average tax rate
Autonomous Expenditure
19. The difference between the price received by the seller and the seller's reservation price
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20. The rate of price increase on all things except food and energy
Core rate of inflation
The real GDP per person
Capitalism
Keynesian economic theory
21. A Scottish man (1723-1790) who is known as the father of modern economics.
Adam Smith
Participation rate
decreases increases
Business cycle
22. 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).
Inside lag
Frictional unemployment
Automatic stabilizers
Real quantity
23. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)
Pay
Traditional economic system
Output gap
Market equilibrium
24. When inflation suddenly deviates from its normal course.
The Wealth Effect
Indexing
Okun's Law
Inflation shock
25. Used in the production of final goods - but instead of being consumed - are available for reuse.
Real GDP
NRU
Capital goods
AD curve intersects the SAS curve
26. An economic system in which all factors of production are owned and controlled by the government. Often referred to as a centrally planned economic system. Example: Former Soviet Union.
Command economic system
Gross National Product (GNP)
Trough
The Wealth Effect
27. The price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time.
Nominal GDP
decreases increases
Credibility of monetary policy
Equilibrium price
28. 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
Congressional budget office
Real GDP
Marginal cost
Aggregate Supply
29. The continuing increase in the average level of prices of goods and services over time.
Inflation shock
Supply-side policy
Potential output
Inflation
30. A result of there only being one buyer of a resource input - good - or service.
Monopsony
Labor productivity
Income
Marginal cost
31. The part of economics study that looks at the operation of a nation's economy as a whole
Gross Domestic Product (GDP)
Quantity equation
Macroeconomics
Potential output
32. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Labor unions
Capital income
Phillips curve
Aggregate supply shock
33. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Policy reaction function
Recession
AD curve intersects the SAS curve
Businesses
34. Payments that the government makes to unemployed workers.
Potential output
Labor supply
Unemployment insurance
Aggregate supply
35. The degree to which people have access to goods and services that make their lives better.
Standard of living
Socially optimal quantity
Labor productivity
Four sectors of the economy
36. The time between the need for a macroeconomic policy and its implementation
Complement
Inside lag
Inflation
AD curve intersects the SAS curve
37. 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.
Four sectors of the economy
Law of Supply
Aggregate demand
Inflation inertia
38. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Monetarism
Participation rate
Fisher effect
Saving
39. Most free-market banking systems are based on __________ reserves.
Peak
Fractional
Laffer curve
Planned aggregate expenditure (PAE)
40. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Businesses
Socially optimal quantity
Marginal cost
Complement
41. Total tax paid divided by total (taxable) income - as a percentage.
Complement
Average tax rate
Seller's surplus
Consumption
42. 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
Indexing
Short run equilibrium output
Marginal cost
43. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Law of Supply
Rationing
Marginal benefit
Price
44. The beginning of a recession
Real GDP
Okun's Law
Capital income
Peak
45. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Market equilibrium
Economic efficiency
Disinflation
AD curve intersects the SAS curve
46. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
Total surplus
LRAS
Anchored inflation expectations
Labor supply
47. The real cost of changing a listed price.
The Wealth Effect
Marginal tax rate
Standard of living
Menu cost
48. 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
Nominal GDP
Exchange
Monetarism
Free market
49. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Intermediate Goods
Labor productivity
Boom
Keynesian economic theory
50. The annual percentage rate of change in price level reflected by price indexes
Reservation price
Saving
Intermediate goods
The rate of inflation