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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. There is an ___________ ___ when aggregate output is above potential output






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






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






4. That efficiency leads to economic prosperity for all.






5. When an economic unit makes more than it spends






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






7. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.






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






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






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






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






12. A law stating that as the price of a product increases the demand of that product decreases - while if the price of a product decreases the demand for that product increases.






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






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






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






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






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






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






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






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






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






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






24. 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






25. 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.






26. The percentage of working-age people within the labor force






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






28. 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.






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






30. The time period between a policy's implementation and its desired effects on an economy.






31. 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.






32. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.






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






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






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






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






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






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






39. Goods not counted in the nation's GDP.






40. 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






41. The adding up of individual economic variables to obtain a large - general picture of the economy.






42. Money multiplied by velocity equals nominal GDP.






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






44. Describes how the economy directly effects the actions policymakers take.






45. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.






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






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






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






49. A result of there only being one buyer of a resource input - good - or service.






50. 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.