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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. A large - unexpected change in the cost of resources.






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






3. Combines pure market and command. Example: Japan






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.






5. A GDP decline that lasts two-quarters (six months). A period of slow economic growth






6. When the rate of inflation is extremely high.






7. 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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8. Extreme economic growth






9. 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.






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






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






12. Used to demonstrate shifts in income distribution among a population over time.






13. When both producers and consumers are satisfied with their quantities at market price.






14. The real cost of changing a listed price.






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






16. That efficiency leads to economic prosperity for all.






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






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






19. 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.






20. 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.






21. 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






22. When inflation suddenly deviates from its normal course.






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






24. The beginning of a recession






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






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






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






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






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






30. 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.






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






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






33. Most free-market banking systems are based on __________ reserves.






34. 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






35. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.






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






37. The labor sector highlights the rate of ____ .






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






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






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






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






42. 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






43. When an economic unit makes more than it spends






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






45. A record of economic increases and decreases over time.






46. Money multiplied by velocity equals nominal GDP.






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






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






49. Government policies intended to increase spending and output.






50. The rise in taxes that occurs when before-tax income increases by one dollar