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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.
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Match each statement with the correct term.
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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. Most free-market banking systems are based on __________ reserves.
Fractional
Law of Demand
Aggregate demand
Interest
2. The percentage of working-age people within the labor force
Real employment
The rate of inflation
Participation rate
Four sectors of the economy
3. 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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4. Goods like food and clothing that have a short lifespan.
Hyperinflation
Standard of living
Consumer Nondurables
Aggregate supply
5. The labor sector highlights the rate of ____ .
Pay
Intermediate Goods
Disinflation
Price
6. The price of a good or service in relation to the price of other goods and services.
Keynesian economic theory
Income
Relative price
Autonomous Expenditure
7. When people's expectations of future inflation do not change even though inflation rates change.
Trough
Anchored inflation expectations
Pay
AD curve intersects the SAS curve
8. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Rationing
Buyer's surplus
The real GDP per person
Socially optimal quantity
9. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Frictional unemployment
The principle of efficiency
Pay
Keynesian economic theory
10. Natural Rate of Unemployment - a rate that will always exist
Traditional economic system
NRU
Aggregate demand
Velocity
11. Real Estate - Equipment - and Cash (physical assets)
Capital income
Macroeconomics
Autonomous Expenditure
Tangible Assets
12. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Complement
Boom
Equilibrium price
Normative analysis
13. 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
Seller's reservation price
Gross National Product (GNP)
Substitution bias
Stabilization policies
14. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Indexing
Boom
Aggregate demand
Disinflation
15. The maximum amount that an economy can output over a period of time
Potential output
Socially optimal quantity
Corporation
Menu cost
16. Caused by changes in the overall economy.
Inflation shock
Law of Demand
Real quantity
Cyclical unemployment
17. Represents the governmental tax rate that will best maximize tax revenues.
Adam Smith
Laffer curve
Sunk cost
Marginal tax rate
18. When there is no cyclical unemployment and every person who wishes to work is able to find a job at the prevailing rate for wages and in the prevailing working conditions.
Real employment
Aggregate demand
Consumption function
Substitution effect
19. When an economic unit makes more than it spends
Saving
Mixed market
Sunk cost
Real GDP
20. The real cost of changing a listed price.
decreases increases
Law of Diminishing Marginal Utility
Price level
Menu cost
21. A Scottish man (1723-1790) who is known as the father of modern economics.
Inflationary gap
Frictional unemployment
Anchored inflation expectations
Adam Smith
22. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
Nominal GDP
Disinflation
The quality adjustment bias
Intermediate goods
23. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
Nominal GDP
LRAS
Total surplus
Gross National Product (GNP)
24. Money multiplied by velocity equals nominal GDP.
Inflation
Autonomous Expenditure
Menu cost
Quantity equation
25. 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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26. The relationship between disposable income and spending on consumable goods and services
Capital income
Phillips curve
Substitution effect
Consumption function
27. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made
Aggregation
Sunk cost
Standard of living
Expansionary policies
28. A quantity that is measured in real terms - the actual quantity of a good or service
Complement
Supply-side policy
Real quantity
Monopsony
29. The output per employed worker
Consumer Nondurables
Labor productivity
Substitution bias
Monopsony
30. Extreme economic growth
Hyperinflation
Gross National Product (GNP)
The principle of efficiency
Boom
31. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
NRU
The rate of inflation
Rationing
Structural unemployment
32. 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.
Consumption function
Laffer curve
Traditional economic system
decreases increases
33. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).
Trough
decreases increases
Boom
Phillips curve
34. Legal entity that has received a charter from a state or federal government.
Seller's reservation price
Income
Anchored inflation expectations
Corporation
35. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Capital income
Inflation inertia
Substitution effect
Stabilization policies
36. Government policies aimed at stabilizing the economy by eliminating output gaps
Aggregate supply
Free market
Stabilization policies
Buyer's surplus
37. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Gross Domestic Product (GDP)
Businesses
Price level
Command economic system
38. A record of economic increases and decreases over time.
Business cycle
Capital goods
Boom
Peak
39. When both producers and consumers are satisfied with their quantities at market price.
Corporation
Anchored inflation expectations
Market equilibrium
Seller's surplus
40. Goods and services sector - Labor sector - monetary sector - international sector.
Asset
Saving
Tangible Assets
Four sectors of the economy
41. A macroeconomic policy that directly affects the structure and various institutions of an economy
Credibility of monetary policy
Businesses
Monopsony
Structural policy
42. Describes how the economy directly effects the actions policymakers take.
Worker mobility
Policy reaction function
Aggregate supply
Income
43. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Planned aggregate expenditure (PAE)
Total surplus
Law of Demand
Adam Smith
44. The monetary sector focuses on the ________ rate.
Relative price
Interest
Consumption
Real quantity
45. The degree to which people have access to goods and services that make their lives better.
Gross National Product (GNP)
Standard of living
Disinflation
Relative price
46. The beginning of a recession
Traditional economic system
Peak
Reservation price
Saving
47. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Law of Supply
Sunk cost
decreases increases
Asset
48. The part of economics study that looks at the operation of a nation's economy as a whole
Macroeconomics
Command economic system
Equilibrium price
Nominal GDP
49. Goods that are used in the production of final goods.
Keynesian model
Total surplus
Sole proprietorship
Intermediate goods
50. The time between the need for a macroeconomic policy and its implementation
Inside lag
Exchange
Capital income
Aggregation
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