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






2. 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.






3. When prices fall consistently over time - leading to negative inflation.






4. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus






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






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






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






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






9. Demonstrates that there is an inverse relationship between inflation and unemployment; as inflation increases - unemployment decreases (and vice versa).






10. 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






11. When inflation suddenly deviates from its normal course.






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






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






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






15. 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.






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






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






18. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .






19. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available






20. Government policies intended to increase spending and output.






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






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






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






24. 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






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






26. Used in the production of final goods - but instead of being consumed - are available for reuse.






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






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






29. The total planned spending on final goods and services.






30. The monetary sector focuses on the ________ rate.






31. An increase in spending due to a perceived increase in wealth.






32. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.






33. A policy that affects potential output






34. 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.






35. 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.






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






37. The portion of planned aggregate expenditure that is not based on output






38. The lowest point of the recession






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






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






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






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






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






44. The output per employed worker






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






46. Extreme economic growth






47. Total supply of goods and services in an economy






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






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






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