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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.
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. Business entity which legally has no separate existence from its owner.
Complement
Sole proprietorship
Output gap
Inside lag
2. Concerned with analyzing whether or not a policy should be used.
Sunk cost
The Wealth Effect
Monopsony
Normative analysis
3. A measure of overall price levels at a specific point in the price index.
Standard of living
Automatic stabilizers
Price level
Tangible Assets
4. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Total surplus
Autonomous Expenditure
Pay
Socially optimal quantity
5. Used to demonstrate shifts in income distribution among a population over time.
Lorenz curve
LRAS
Labor supply
Gross Domestic Product (GDP)
6. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.
Excess Supply
Aggregate demand
Consumer Nondurables
Seller's surplus
7. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Real employment
Expansionary policies
Total surplus
Marginal benefit
8. 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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9. The level of output where output equals planned aggregate expenditure
Short run equilibrium output
Hyperinflation
Rationing
Boom
10. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
Contractionary policies
AD curve intersects the SAS curve
Free market
decreases increases
11. Government policies aimed at stabilizing the economy by eliminating output gaps
Automatic stabilizers
Capital income
Stabilization policies
Asset
12. The output per employed worker
Potential output
Invisible hand
Intermediate goods
Labor productivity
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
Law of Demand
Marginal tax rate
Substitution bias
Law of Diminishing Marginal Utility
14. A law stating that as a person consumes additional units of a good - eventually the utility gained from each additional unit of the good decreases.
Marginal tax rate
Law of Diminishing Marginal Utility
Marginal benefit
Menu cost
15. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
LRAS
Intermediate Goods
Standard of living
Peak
16. 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.
Capital income
Aggregation
Command economic system
Law of Supply
17. 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.
Average tax rate
Exchange
Recession
Equilibrium price
18. 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
Substitution effect
Real GDP
Partnership
Stabilization policies
19. The adding up of individual economic variables to obtain a large - general picture of the economy.
Saving
Aggregation
Intermediate goods
Inflation
20. Total tax paid divided by total (taxable) income - as a percentage.
Participation rate
Average tax rate
Consumer Nondurables
Market equilibrium
21. There is an ___________ ___ when aggregate output is above potential output
Aggregate supply
Sole proprietorship
Marginal cost
Inflationary gap
22. The lowest point of the recession
Aggregate supply
Inflation
Trough
Income
23. The percentage of working-age people within the labor force
Equilibrium price
Participation rate
Saving
Gross Domestic Product (GDP)
24. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
Monetarism
Substitution bias
Aggregate Supply
Complement
25. That efficiency leads to economic prosperity for all.
Sole proprietorship
The principle of efficiency
Aggregation
Socially optimal quantity
26. The maximum amount that an economy can output over a period of time
AD curve intersects the SAS curve
Marginal tax rate
Potential output
Capital income
27. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Invisible hand
Consumption
Interest
Marginal benefit
28. Describes how the economy directly effects the actions policymakers take.
decreases increases
Contractionary policies
Policy reaction function
The Wealth Effect
29. The increase in total benefit that comes from producing one additional unit.
Saving
Income
Marginal benefit
Inflation inertia
30. The slow change in inflation from year to year in industrialized nations
Aggregate Supply
Labor supply
Inflation inertia
Marginal benefit
31. The time period between a policy's implementation and its desired effects on an economy.
Outside lag
The quality adjustment bias
Quantity equation
Law of Diminishing Marginal Utility
32. A Scottish man (1723-1790) who is known as the father of modern economics.
The real GDP per person
Potential output
Adam Smith
Trough
33. The increase in total cost that comes from producing one additional unit of a specific good or service.
Expansionary policies
Marginal cost
Equilibrium price
Keynesian model
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.
Adam Smith
Total surplus
Price level
Automatic stabilizers
35. The difference between the price received by the seller and the seller's reservation price
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36. The ease with which an asset can be converted to currency.
Liquidity
Planned aggregate expenditure (PAE)
Consumption
Real GDP
37. Goods like food and clothing that have a short lifespan.
Income
Consumer Nondurables
Asset
Autonomous Expenditure
38. Money multiplied by velocity equals nominal GDP.
Real employment
Labor productivity
Labor supply
Quantity equation
39. A record of economic increases and decreases over time.
Inflation inertia
Peak
AD curve intersects the SAS curve
Business cycle
40. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Consumption
Saving
Outside lag
Substitution effect
41. 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.
Law of Supply
Price
Asset
Intangible Assets
42. The movement of workers between jobs - companies - and industries
Excess Supply
Worker mobility
Inflation inertia
Core rate of inflation
43. Combines pure market and command. Example: Japan
Laffer curve
Aggregate Supply
Asset
Mixed market
44. The international sector emphasizes the ________ rate.
Autonomous Expenditure
Aggregate supply shock
Contractionary policies
Exchange
45. The rise in taxes that occurs when before-tax income increases by one dollar
Output gap
Marginal tax rate
Deflation
Anchored inflation expectations
46. A policy that affects potential output
Saving
Supply-side policy
Frictional unemployment
Tangible Assets
47. Natural Rate of Unemployment - a rate that will always exist
Rationing
NRU
Credibility of monetary policy
Phillips curve
48. Unicorporated entity that has shared ownership.
Output gap
The principle of efficiency
Partnership
Normative analysis
49. A macroeconomic policy that directly affects the structure and various institutions of an economy
Real employment
Structural policy
Supply-side policy
Sunk cost
50. Organizations that act as moderators between employers and employees
Labor unions
Rationing
Labor productivity
Aggregation