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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. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally






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






3. Extreme economic growth






4. The lowest point of the recession






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






6. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.






7. The level of output where output equals planned aggregate expenditure






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






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






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






11. 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.






12. The maximum amount that an economy can output over a period of time






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






14. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.






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






16. The time between the need for a macroeconomic policy and its implementation






17. Total supply of goods and services in an economy






18. 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.






19. 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.






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






21. A macroeconomic policy that directly affects the structure and various institutions of an economy






22. The government office that is responsible for projecting federal surpluses and deficits






23. Short-run macroeconomic equilibrium occurs at the level of GDP where the:






24. That efficiency leads to economic prosperity for all.






25. The slow change in inflation from year to year in industrialized nations






26. When an economic unit makes more than it spends






27. The beginning of a recession






28. 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.






29. Natural Rate of Unemployment - a rate that will always exist






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






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






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






34. Organizations that act as moderators between employers and employees






35. 1 percent more unemployment results in 2 percent less output.

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






37. 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






38. Total tax paid divided by total (taxable) income - as a percentage.






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






40. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.






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






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






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






44. Caused by changes in the overall economy.






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






46. (n) something of value; a resource; an advantage






47. The real cost of changing a listed price.






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






49. Patents - Goodwill - and Trademarks (lack physical substance)






50. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.