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Test your basic knowledge |
CLEP Macroeconomics - 3
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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 the rate of inflation is extremely high.
Keynesian model
Hyperinflation
Outside lag
Businesses
2. 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.
Complement
Law of Diminishing Marginal Utility
Free market
Gross Domestic Product (GDP)
3. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
NRU
Expansionary policies
Fisher effect
Businesses
4. The time period between a policy's implementation and its desired effects on an economy.
Outside lag
Excess Supply
Mixed market
Inflationary gap
5. The relationship between disposable income and spending on consumable goods and services
Gross National Product (GNP)
The real GDP per person
Consumption function
Output gap
6. Business entity which legally has no separate existence from its owner.
Sole proprietorship
Sunk cost
Potential output
Worker mobility
7. Distributing a good or resource among consumers that would like to have more of that good or resource than is made available
Labor productivity
Participation rate
Rationing
Fisher effect
8. The amount of workers that are willing to work for a real wage.
Marginal tax rate
Congressional budget office
Labor supply
Recession
9. An increase in this would cause an increase in the aggregate supply
Labor productivity
Consumer Nondurables
The Wealth Effect
Fisher effect
10. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
Inflation shock
Contractionary policies
LRAS
Monetarism
11. An extreme decline in the rate of inflation. Can lead to high levels of unemployment and recessionary gaps.
Invisible hand
Mixed market
Aggregate supply
Disinflation
12. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
Indexing
Stabilization policies
Menu cost
Macroeconomics
13. Goods not counted in the nation's GDP.
Keynesian economic theory
Intermediate Goods
Consumer Nondurables
Mixed market
14. There is an ___________ ___ when aggregate output is above potential output
Inflationary gap
Deflation
Capital income
Hyperinflation
15. Total tax paid divided by total (taxable) income - as a percentage.
Average tax rate
Invisible hand
Automatic stabilizers
Price level
16. The beginning of a recession
Socially optimal quantity
Structural policy
Peak
Short run equilibrium output
17. Maximum price that a customer is willing to pay for a good
Corporation
Reservation price
The quality adjustment bias
Economic efficiency
18. The speed that money changes hands in order to buy and sell final goods and services.
Substitution bias
Invisible hand
Core rate of inflation
Velocity
19. The total planned spending on final goods and services.
Average tax rate
Inflation shock
LRAS
Planned aggregate expenditure (PAE)
20. Most free-market banking systems are based on __________ reserves.
Gross National Product (GNP)
Four sectors of the economy
Fisher effect
Fractional
21. 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.
Complement
Stabilization policies
Socially optimal quantity
Law of Supply
22. When the people believe that the nation's central bank will keep inflation rates low.
Real employment
Business cycle
Credibility of monetary policy
Gross National Product (GNP)
23. The continuing increase in the average level of prices of goods and services over time.
Fisher effect
Inflation
Price level
Partnership
24. The basic assumption of this model is that in the short run - firms meet demand at present price.
Expansionary policies
Sunk cost
Recession
Keynesian model
25. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Relative price
Real quantity
Structural unemployment
Disinflation
26. On a demand curve - the _____ of the item is placed on the vertical axis of the graph.
Fractional
Aggregate supply shock
NRU
Price
27. Used in the production of final goods - but instead of being consumed - are available for reuse.
Hyperinflation
Macroeconomics
Capital goods
Contractionary policies
28. The increase in total benefit that comes from producing one additional unit.
Consumer Nondurables
Socially optimal quantity
Macroeconomics
Marginal benefit
29. The difference between the price received by the seller and the seller's reservation price
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30. The level of output where output equals planned aggregate expenditure
Fractional
Traditional economic system
Potential output
Short run equilibrium output
31. 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
Asset
Corporation
Consumer Nondurables
Monetarism
32. A macroeconomic policy that directly affects the structure and various institutions of an economy
Aggregate Supply
Structural policy
Worker mobility
Business cycle
33. 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.
Unemployment insurance
Adam Smith
Law of Demand
Saving
34. Government policies aimed at stabilizing the economy by eliminating output gaps
Stabilization policies
Reservation price
Law of Diminishing Marginal Utility
Real quantity
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.
Real employment
Frictional unemployment
The rate of inflation
Gross Domestic Product (GDP)
36. A market with unrestricted trading of goods - where the prices of goods are determined by supply and demand.
Free market
Recession
Capitalism
Labor productivity
37. When quantity supplied is more than quantity demanded. The formula for excess supply is: Supply - Demand = Excess Supply
Intangible Assets
Core rate of inflation
Reservation price
Excess Supply
38. The real cost of changing a listed price.
Structural unemployment
Labor productivity
Menu cost
The Wealth Effect
39. Goods like food and clothing that have a short lifespan.
Menu cost
Consumer Nondurables
The real GDP per person
Tangible Assets
40. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Substitution effect
Nominal GDP
Velocity
Expansionary policies
41. Describes how the economy directly effects the actions policymakers take.
Market equilibrium
Fisher effect
Liquidity
Policy reaction function
42. When people's expectations of future inflation do not change even though inflation rates change.
Business cycle
Inflation
Anchored inflation expectations
Average tax rate
43. The labor sector highlights the rate of ____ .
Law of Supply
Complement
The quality adjustment bias
Pay
44. Money multiplied by velocity equals nominal GDP.
Sunk cost
Quantity equation
Interest
Price level
45. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Consumption function
Marginal tax rate
Core rate of inflation
Invisible hand
46. The adding up of individual economic variables to obtain a large - general picture of the economy.
Cyclical unemployment
Boom
Businesses
Aggregation
47. If the Federal Reserve lowers the reserve ratio - it ______ the bank's required reserves and ______ the quantity of money.
Aggregate Supply
Stabilization policies
decreases increases
Capital goods
48. The total demand for a country's output. It includes demands for consumption - investment - government purchases - and net exports.
Income
Total surplus
Relative price
Aggregate demand
49. The lowest point of the recession
Trough
Anchored inflation expectations
Monopsony
Consumption
50. The government office that is responsible for projecting federal surpluses and deficits
Keynesian economic theory
Congressional budget office
Lorenz curve
Labor supply