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Test your basic knowledge |
CLEP Macroeconomics - 3
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Study First
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. When economists fail to account for improvements in goods or services and incorrectly report inflation as higher.
Law of Supply
The quality adjustment bias
Sunk cost
Participation rate
2. Total tax paid divided by total (taxable) income - as a percentage.
Lorenz curve
Liquidity
Consumption function
Average tax rate
3. 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
Automatic stabilizers
Autonomous Expenditure
Substitution effect
Substitution bias
4. A free market system that relies on private property ownership and supply and demand
Fractional
Law of Supply
Capitalism
Substitution bias
5. Organizations that act as moderators between employers and employees
Labor unions
Market equilibrium
decreases increases
Menu cost
6. Maximum price that a customer is willing to pay for a good
Intangible Assets
Lorenz curve
AD curve intersects the SAS curve
Reservation price
7. When prices fall consistently over time - leading to negative inflation.
Planned aggregate expenditure (PAE)
Deflation
Marginal tax rate
Businesses
8. The beginning of a recession
The quality adjustment bias
Law of Demand
Peak
Deflation
9. Short-run macroeconomic equilibrium occurs at the level of GDP where the:
AD curve intersects the SAS curve
Laffer curve
Monetarism
Sunk cost
10. The monetary sector focuses on the ________ rate.
Traditional economic system
Equilibrium price
Gross Domestic Product (GDP)
Interest
11. The ease with which an asset can be converted to currency.
Anchored inflation expectations
Seller's reservation price
Four sectors of the economy
Liquidity
12. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
Real GDP
Command economic system
Marginal cost
Free market
13. The total planned spending on final goods and services.
Intermediate Goods
Gross Domestic Product (GDP)
Planned aggregate expenditure (PAE)
Corporation
14. 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.
Real employment
Corporation
Interest
Intangible Assets
15. 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.
Seller's surplus
Labor unions
Mixed market
Law of Supply
16. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Economic efficiency
Keynesian economic theory
Autonomous Expenditure
Real employment
17. A GDP decline that lasts two-quarters (six months). A period of slow economic growth
Automatic stabilizers
Average tax rate
Keynesian model
Recession
18. The amount spent by a household on goods and services such as: entertainment - food - and other perishables.
Real employment
Socially optimal quantity
Consumption
Income
19. The part of economics study that looks at the operation of a nation's economy as a whole
Fisher effect
Autonomous Expenditure
Excess Supply
Macroeconomics
20. When people's expectations of future inflation do not change even though inflation rates change.
Intermediate Goods
Policy reaction function
Inside lag
Anchored inflation expectations
21. The increase in total cost that comes from producing one additional unit of a specific good or service.
Market equilibrium
Marginal cost
Outside lag
Exchange
22. The annual percentage rate of change in price level reflected by price indexes
Potential output
NRU
Recession
The rate of inflation
23. Government policies aimed at stabilizing the economy by eliminating output gaps
Okun's Law
Fractional
Hyperinflation
Stabilization policies
24. A policy that affects potential output
Labor supply
Socially optimal quantity
Outside lag
Supply-side policy
25. Goods like food and clothing that have a short lifespan.
Equilibrium price
Trough
Saving
Consumer Nondurables
26. A record of economic increases and decreases over time.
Business cycle
Structural policy
Outside lag
Peak
27. The lowest point of the recession
Keynesian model
Trough
Reservation price
Real quantity
28. The value of all goods and services produced anywhere in the world by a nation's citizens during a specified amount of time.
Okun's Law
AD curve intersects the SAS curve
Nominal GDP
Gross National Product (GNP)
29. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Keynesian economic theory
Invisible hand
Tangible Assets
Aggregate Supply
30. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Traditional economic system
decreases increases
Frictional unemployment
Labor productivity
31. The goods and services sector focuses largely on the level of ______ .
Aggregate supply shock
Inflation
Income
Potential output
32. The government office that is responsible for projecting federal surpluses and deficits
Interest
Invisible hand
Rationing
Congressional budget office
33. Goods that are used in the production of final goods.
Laffer curve
Saving
Labor unions
Intermediate goods
34. Patents - Goodwill - and Trademarks (lack physical substance)
Intangible Assets
Keynesian model
Capital income
Substitution effect
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.
Aggregation
Gross Domestic Product (GDP)
Aggregate Supply
Automatic stabilizers
36. The basic assumption of this model is that in the short run - firms meet demand at present price.
Inflation shock
Keynesian model
Command economic system
Indexing
37. 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
Trough
Interest
AD curve intersects the SAS curve
38. Refers to individuals between jobs seeking new employment - people re-entering the workforce (ie mom whose kids are grown) - and new entrants (ie college graduates).
Marginal tax rate
Adam Smith
Total surplus
Frictional unemployment
39. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
LRAS
Invisible hand
Seller's surplus
Expansionary policies
40. Used to demonstrate shifts in income distribution among a population over time.
Four sectors of the economy
Labor productivity
Average tax rate
Lorenz curve
41. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
Intermediate goods
Indexing
LRAS
Seller's reservation price
42. Describes how the economy directly effects the actions policymakers take.
decreases increases
Four sectors of the economy
Substitution effect
Policy reaction function
43. The increase in total benefit that comes from producing one additional unit.
Invisible hand
Outside lag
Marginal benefit
Hyperinflation
44. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Law of Demand
Interest
Saving
Businesses
45. The maximum amount that an economy can output over a period of time
Traditional economic system
Supply-side policy
Potential output
Interest
46. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Capital income
Macroeconomics
Socially optimal quantity
Hyperinflation
47. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Indexing
Rationing
Nominal GDP
Fisher effect
48. 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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49. A macroeconomic policy that directly affects the structure and various institutions of an economy
decreases increases
Structural policy
Income
Labor productivity
50. The speed that money changes hands in order to buy and sell final goods and services.
Worker mobility
Unemployment insurance
Velocity
Gross Domestic Product (GDP)