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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. Government policies intended to increase spending and output.






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






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






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






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






7. Money multiplied by velocity equals nominal GDP.






8. Legal entity that has received a charter from a state or federal government.






9. 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.






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






11. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.






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






13. A policy that affects potential output






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






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






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






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






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






19. 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






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






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






22. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.






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






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






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






26. The difference between the price received by the seller and the seller's reservation price

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






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






29. Payments that the government makes to unemployed workers.






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






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






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






33. The lowest point of the recession






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






35. 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).






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






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






38. The output per employed worker






39. 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.






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






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






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






43. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.






44. A difference between the potential output (potential GDP) of an economy and its actual output (actual GDP)






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






46. The real cost of changing a listed price.






47. Business entity which legally has no separate existence from its owner.






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






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






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