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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.
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. Combines pure market and command. Example: Japan
Frictional unemployment
Trough
Mixed market
Equilibrium price
2. Natural Rate of Unemployment - a rate that will always exist
Trough
Intermediate goods
Price level
NRU
3. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made
Sunk cost
Market equilibrium
Worker mobility
Quantity equation
4. The increase in total cost that comes from producing one additional unit of a specific good or service.
Consumption
Law of Supply
Price level
Marginal cost
5. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Consumption function
Free market
Rationing
Fractional
6. 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.
Law of Diminishing Marginal Utility
Law of Demand
Stabilization policies
Inflation inertia
7. The government office that is responsible for projecting federal surpluses and deficits
Labor unions
Normative analysis
Congressional budget office
Okun's Law
8. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Total surplus
Real employment
Structural unemployment
Cyclical unemployment
9. Business entity which legally has no separate existence from its owner.
Sole proprietorship
Menu cost
Inflationary gap
Standard of living
10. The increase in total benefit that comes from producing one additional unit.
Disinflation
Buyer's surplus
Marginal benefit
Indexing
11. An increase in spending due to a perceived increase in wealth.
Short run equilibrium output
The quality adjustment bias
The Wealth Effect
Planned aggregate expenditure (PAE)
12. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Socially optimal quantity
Cyclical unemployment
Standard of living
Excess Supply
13. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
Aggregate Supply
Inflation inertia
Interest
Supply-side policy
14. Total supply of goods and services in an economy
Participation rate
Aggregate supply
Congressional budget office
Potential output
15. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
AD curve intersects the SAS curve
Consumer Nondurables
Quantity equation
Stabilization policies
16. A measure of overall price levels at a specific point in the price index.
Price level
Inflation inertia
Monetarism
Supply-side policy
17. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Cyclical unemployment
Gross National Product (GNP)
Aggregate Supply
Autonomous Expenditure
18. The part of economics study that looks at the operation of a nation's economy as a whole
Macroeconomics
Buyer's surplus
Inflation inertia
Recession
19. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Consumer Nondurables
Aggregate supply
Economic efficiency
Quantity equation
20. 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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21. A large - unexpected change in the cost of resources.
Law of Supply
Aggregate supply shock
Gross Domestic Product (GDP)
Consumption function
22. 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.
LRAS
Relative price
Real employment
Contractionary policies
23. A macroeconomic policy that directly affects the structure and various institutions of an economy
Structural policy
Marginal tax rate
The rate of inflation
Corporation
24. 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.
Monopsony
Real employment
Aggregate demand
Seller's reservation price
25. 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.
Command economic system
AD curve intersects the SAS curve
Real employment
Short run equilibrium output
26. The degree to which people have access to goods and services that make their lives better.
Aggregate Supply
Standard of living
Inflation shock
Partnership
27. A result of there only being one buyer of a resource input - good - or service.
Contractionary policies
Standard of living
Monopsony
Buyer's surplus
28. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Buyer's surplus
Fisher effect
Pay
Businesses
29. The slow change in inflation from year to year in industrialized nations
Corporation
Inflation inertia
The quality adjustment bias
Outside lag
30. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Aggregate Supply
Participation rate
decreases increases
Labor productivity
31. 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.
Automatic stabilizers
Sunk cost
Consumer Nondurables
Trough
32. The annual percentage rate of change in price level reflected by price indexes
Structural unemployment
The rate of inflation
Businesses
Aggregate Supply
33. Used to demonstrate shifts in income distribution among a population over time.
Keynesian economic theory
Intermediate goods
Lorenz curve
Inflation shock
34. The price of a good or service in relation to the price of other goods and services.
Relative price
Average tax rate
Credibility of monetary policy
Contractionary policies
35. The percentage of working-age people within the labor force
Participation rate
Labor unions
Contractionary policies
The rate of inflation
36. The level of output where output equals planned aggregate expenditure
Four sectors of the economy
Short run equilibrium output
Pay
Law of Supply
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
Law of Diminishing Marginal Utility
Market equilibrium
Substitution bias
Potential output
38. (n) something of value; a resource; an advantage
Asset
Intermediate Goods
Substitution effect
Phillips curve
39. When prices fall consistently over time - leading to negative inflation.
Rationing
Reservation price
Gross National Product (GNP)
Deflation
40. 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.
Aggregate supply
Monetarism
Unemployment insurance
Law of Supply
41. Real Estate - Equipment - and Cash (physical assets)
Fisher effect
Tangible Assets
Worker mobility
Automatic stabilizers
42. A GDP decline that lasts two-quarters (six months). A period of slow economic growth
Recession
NRU
Seller's reservation price
Keynesian model
43. The rise in taxes that occurs when before-tax income increases by one dollar
Command economic system
Law of Supply
Marginal tax rate
Expansionary policies
44. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Indexing
Contractionary policies
Outside lag
Intermediate goods
45. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.
Buyer's surplus
Consumption
Worker mobility
Average tax rate
46. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
Pay
Corporation
Potential output
The quality adjustment bias
47. The ease with which an asset can be converted to currency.
Unemployment insurance
The principle of efficiency
Liquidity
Capital income
48. Legal entity that has received a charter from a state or federal government.
Planned aggregate expenditure (PAE)
Corporation
Autonomous Expenditure
Monetarism
49. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Aggregate Supply
Keynesian economic theory
The quality adjustment bias
Saving
50. The total value of goods and services produced in a country valued at current prices.
Real quantity
Labor unions
Nominal GDP
Marginal tax rate
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