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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. 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.






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






3. 1 percent more unemployment results in 2 percent less output.

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4. When an economic unit makes more than it spends






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






6. An increase in this would cause an increase in the aggregate supply






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






8. 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.






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






10. A quantity that is measured in real terms - the actual quantity of a good or service






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






12. Payments that the government makes to unemployed workers.






13. The monetary sector focuses on the ________ rate.






14. The basic assumption of this model is that in the short run - firms meet demand at present price.






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






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






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






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






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






20. 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).






21. Can be found by multiplying the average labor productivity by the percentage of people that are working in the economy.






22. When inflation suddenly deviates from its normal course.






23. The continuing increase in the average level of prices of goods and services over time.






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






25. The rise in taxes that occurs when before-tax income increases by one dollar






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






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






28. 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.






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






30. Used to demonstrate shifts in income distribution among a population over time.






31. Concerned with analyzing whether or not a policy should be used.






32. When the rate of inflation is extremely high.






33. A cost that is beyond recovery the moment a consumer decides to purchase a certain good or service is made






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






35. A Scottish man (1723-1790) who is known as the father of modern economics.






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






37. The speed that money changes hands in order to buy and sell final goods and services.






38. Money multiplied by velocity equals nominal GDP.






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






40. The beginning of a recession






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






42. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally






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






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






45. A free market system that relies on private property ownership and supply and demand






46. Goods like food and clothing that have a short lifespan.






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






48. 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.






49. 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.






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