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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. Sole proprietorships - partnerships - and corporations are private producing units of the economy knows as __________.
Substitution bias
Laffer curve
Businesses
Automatic stabilizers
2. 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.
Stabilization policies
Contractionary policies
Supply-side policy
Disinflation
3. The rate of price increase on all things except food and energy
Substitution bias
Core rate of inflation
Menu cost
Socially optimal quantity
4. Goods like food and clothing that have a short lifespan.
Seller's surplus
Consumer Nondurables
The Wealth Effect
Congressional budget office
5. Concerned with analyzing whether or not a policy should be used.
Businesses
Exchange
Normative analysis
Output gap
6. Goods not counted in the nation's GDP.
Intermediate Goods
Interest
Stabilization policies
Inside lag
7. The rise in taxes that occurs when before-tax income increases by one dollar
Seller's reservation price
Price
Marginal tax rate
Free market
8. 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.
Velocity
Aggregate supply shock
decreases increases
Gross Domestic Product (GDP)
9. A phrase coined by Adam Smith to describe the process that turns self directed gain into social and economic benefits for all.
Invisible hand
Quantity equation
Saving
Liquidity
10. 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.
Reservation price
Participation rate
Law of Diminishing Marginal Utility
Laffer curve
11. When an economic unit makes more than it spends
Quantity equation
Lorenz curve
Saving
Expansionary policies
12. Includes payment to the owners of tangible and intangible capital items such as: factories - machines - and copyrights.
Substitution effect
Capital income
Equilibrium price
Disinflation
13. The speed that money changes hands in order to buy and sell final goods and services.
Velocity
Monopsony
Market equilibrium
Fisher effect
14. The difference between the buyer's reservation price and the seller's reservation price. Consumer surplus + Producer surplus
Fisher effect
Substitution effect
Total surplus
Anchored inflation expectations
15. 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.
Corporation
Aggregation
LRAS
Automatic stabilizers
16. Real Estate - Equipment - and Cash (physical assets)
Business cycle
Adam Smith
Liquidity
Tangible Assets
17. Long Run Aggregate Supply - The natural level of GDP - shown vertical on a graph. When LRAS shifts - SRAS (Short Run Aggregate Supply) will follow .
Structural unemployment
Buyer's surplus
Boom
LRAS
18. That efficiency leads to economic prosperity for all.
The real GDP per person
Labor supply
Inflation shock
The principle of efficiency
19. The continuing increase in the average level of prices of goods and services over time.
Inflation
Short run equilibrium output
Macroeconomics
Labor unions
20. 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.
Substitution effect
Core rate of inflation
Law of Demand
Labor unions
21. The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good.
Socially optimal quantity
Automatic stabilizers
Marginal benefit
Exchange
22. The percentage of working-age people within the labor force
Mixed market
Economic efficiency
Velocity
Participation rate
23. 1 percent more unemployment results in 2 percent less output.
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24. Business entity which legally has no separate existence from its owner.
Velocity
The Wealth Effect
Keynesian economic theory
Sole proprietorship
25. Economies based on capitalism have microeconomic instability and that government is required to properly stabilize the economy.
Keynesian economic theory
Traditional economic system
Standard of living
Gross National Product (GNP)
26. The tendency for nominal interest rates to be high when inflation rates are high and low when inflation rates are low.
Inflation
Trough
Laffer curve
Fisher effect
27. The price at which the number of products that businesses are willing to supply equals the amount of products that consumers are willing to buy at a specific point in time.
Lorenz curve
Equilibrium price
Menu cost
Aggregation
28. Economic rule stating that if two items satisfy the same need and the price of one rises - people will buy the other.
Autonomous Expenditure
Capital income
The principle of efficiency
Substitution effect
29. A record of economic increases and decreases over time.
Menu cost
Business cycle
Contractionary policies
Capital goods
30. A large - unexpected change in the cost of resources.
Aggregate supply shock
Keynesian economic theory
Potential output
Marginal tax rate
31. When goods and services are made and consumed at the best levels for the society. Nothing more can be acheived with the resources available.
Capital income
Output gap
Economic efficiency
Recession
32. The beginning of a recession
Trough
Peak
decreases increases
AD curve intersects the SAS curve
33. Caused by changes in the overall economy.
The Wealth Effect
Cyclical unemployment
Relative price
Consumption function
34. The adding up of individual economic variables to obtain a large - general picture of the economy.
Aggregation
Labor supply
Labor unions
Menu cost
35. 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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36. The real cost of changing a listed price.
Credibility of monetary policy
Law of Supply
Menu cost
Business cycle
37. An increase in this would cause an increase in the aggregate supply
Labor productivity
Seller's reservation price
Hyperinflation
NRU
38. The amount of workers that are willing to work for a real wage.
Unemployment insurance
Labor supply
Inflation shock
Law of Diminishing Marginal Utility
39. Goods and services sector - Labor sector - monetary sector - international sector.
Inflation shock
Aggregate Supply
Four sectors of the economy
Businesses
40. Measures the ability of an economy to produce (output) goods and services in the short-term and the long-term.
Aggregate Supply
Income
Menu cost
Lorenz curve
41. A Scottish man (1723-1790) who is known as the father of modern economics.
Keynesian model
Short run equilibrium output
Socially optimal quantity
Adam Smith
42. Caused by changes in demand or technology. Long-term and continual unemployment that continues even though the economy is producing normally
Free market
Okun's Law
Structural unemployment
Inflation inertia
43. The movement of workers between jobs - companies - and industries
Real employment
Worker mobility
Invisible hand
Indexing
44. A free market system that relies on private property ownership and supply and demand
Businesses
Labor productivity
LRAS
Capitalism
45. Patents - Goodwill - and Trademarks (lack physical substance)
Tangible Assets
Invisible hand
Structural unemployment
Intangible Assets
46. 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
Trough
Economic efficiency
LRAS
47. Involves increasing a nominal quantity so that it remains unaffected by increases in inflation
The Wealth Effect
Indexing
Asset
Rationing
48. Gross domestic product adjusted for inflation; gross domestic product in a year divided by the GDP price index for that year - the index expressed as a decimal
Standard of living
Real GDP
Inflationary gap
Substitution effect
49. The output per employed worker
Output gap
NRU
Labor productivity
Nominal GDP
50. The opposite of a substitute good - because it usually completes another item and may lead to more consumption of that item.
Gross National Product (GNP)
Stabilization policies
Complement
Liquidity